EXHIBIT 4(c)
November 22, 2002
Company Order and Officers' Certificate
6% Senior Notes, Series D, due 2032
The Bank of New York, as Trustee
101 Barclays Street
New York, New York 10286
Ladies and Gentlemen:
Pursuant to Article Two of the Indenture, dated as of October 1, 1998 (as it may
be amended or supplemented, the "Indenture"), from Indiana Michigan Power
Company (the "Company") to The Bank of New York, as trustee (the "Trustee"), and
the Board Resolutions dated January 24, 2001, a copy of which certified by the
Secretary or an Assistant Secretary of the Company is being delivered herewith
under Section 2.01 of the Indenture, and unless otherwise provided in a
subsequent Company Order pursuant to Section 2.04 of the Indenture,
1. the Company's 6% Senior Notes, Series D, due 2032 (the "Notes") are hereby
established. The Notes shall be in substantially the form attached hereto
as Exhibit 1.
2. the terms and characteristics of the Notes shall be as follows (the
numbered clauses set forth below corresponding to the numbered subsections
of Section 2.01 of the Indenture, with terms used and not defined herein
having the meanings specified in the Indenture):
(i) the aggregate principal amount of Notes which may be authenticated and
delivered under the Indenture shall be limited to $150,000,000, except
as contemplated in Section 2.01 of the Indenture;
(ii) the date on which the principal of the Notes shall be payable shall be
December 31, 2032;
(iii)interest shall accrue from the date of authentication of the Notes;
the Interest Payment Dates on which such interest will be payable
shall be March 31, June 30, September 30 and December 31, and the
Regular Record Date for the determination of holders to whom interest
is payable on any such Interest Payment Date shall be one Business Day
prior to the relevant Interest Payment Date, except if the Notes are
no longer represented by a Global Note, then the Regular Record Date
shall be the close of business on the March 15, June 15, September 15
or December 15, as the case may be, next preceding such Interest
Payment Date; provided, that interest payable on the Stated Maturity
Date or any Redemption Date shall be paid to the Person to whom
principal shall be paid; (iv) the interest rate at which the Notes
shall bear interest shall be 6% per annum;
(v)(a) the Notes shall be redeemable at the option of the Company, in whole
or in part, at any time on or after November 22, 2007, upon not less
than 30 nor more than 60 days' notice, at 100% of the principal amount
redeemed together with accrued and unpaid interest to the redemption
date;
(v)(b) the Notes shall be redeemed in the event (I)(A) the Company
reorganizes, or otherwise transfers a substantial portion of its
assets, and (B) that reorganization or transfer results in the Company
no longer being a regulated utility company, and (C) the Notes and the
Company's obligations under the Indenture are not assumed by, and do
not become the direct and primary obligations of, a regulated utility
company, unless Ambac Assurance Corporation ("Ambac") consents to such
reorganization or transfer, (II) the Company fails to pay to Ambac an
insurance premium pursuant to the Insurance Agreement, dated as of
November 22, 2002 (the Insurance Agreement), between the Company and
Ambac unless Ambac waives such failure or (III) the Company incurs or
issues additional indebtedness for borrowed money secured by its
assets and fails to secure its repayment obligations to Ambac under
the Insurance Agreement unless Ambac waives such failure.
If the Notes are redeemed pursuant to his paragraph (v)(b) on or after
November 22, 2007, the redemption price will be 100% of the principal
amount of the Senior Notes plus accrued and unpaid interest thereon to
the date of redemption. If the Notes are redeemed pursuant to this
paragraph (v)(b) before November 22, 2007, the redemption price will
be equal to the accrued interest on the Notes to the date of
redemption plus the greater of: (I) 100% of the principal amount of
the Senior Notes; and (II) the sum of the present value of the
principal amount of the Senior Notes together with the present values
of the scheduled payments of interest on the Senior Notes (not
including any portion of such payments of interest accrued as of the
date of redemption) from the date of redemption to the interest
payment date on December 31, 2007 (such time period between the date
of redemption and the interest payment date on December 31, 2007 being
referred to as the "Remaining Term"), in each case discounted to the
date of redemption on a quarterly basis (assuming a 360-day year
consisting of twelve 30-day months) at the Adjusted Treasury Rate plus
twenty-five (25) basis points, as calculated by an Independent
Investment Banker.
"Adjusted Treasury Rate" means, with respect to any redemption rate
(I) the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published
statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Board of Governors of the
Federal Reserve System and which establishes yields on actively traded
United States Treasury securities adjusted to constant maturity under
the caption "Treasury Constant Maturities", for the maturity
corresponding to the Comparable Treasury Issue (if no maturity is
within three months before or after the Remaining Term, yields for the
two published maturities most closely corresponding to the Comparable
Treasury issue shall be determined and the adjusted Treasury Rate
shall be interpolated or extrapolated from such yields on a straight
line basis, rounding to the nearest month); or (II) if such release
(or any successor release) is not published during the week preceding
the calculation date or does not contain such yields, the rate per
annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, calculated using a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such redemption date. The
Adjusted Treasury Rate shall be calculated on the third business day
preceding the redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity
comparable to the Remaining Term of the securities to be redeemed that
would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the Remaining Term of the Senior
Notes.
"Comparable Treasury Price" means (1) the average of five Reference
Treasury Dealer Quotations for such Redemption Date, after excluding
the highest and lowest Reference Treasury Dealer Quotations, or (2) if
the Independent Investment Banker obtains fewer than five such
Reference Treasury Dealer Quotations, the average of all such
quotations.
"Independent Investment Banker" means one of the Reference Treasury
Dealers appointed by us.
"Reference Treasury Dealer" means (I) each of Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Salomon Smith Barney Inc. and UBS Warburg
LLC, and their respective successors; provided that, if any of the
foregoing ceases to be a primary U.S. Government securities dealer in
the United States (a "Primary Treasury Dealer"), the Company will
substitute another Primary Treasury Dealer; and (II) any other Primary
Treasury Dealer selected by the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as
determined by the Independent Investment Banker, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the
Independent Investment Banker at 5:00 p.m., New York City time, on the
third business day preceding such redemption date.
(vi) (a) the Notes shall be issued in the form of a Global Note; (b) the
Depositary for such Global Note shall be The Depository Trust Company;
and (c) the procedures with respect to transfer and exchange of Global
Notes shall be as set forth in the form of Note attached hereto;
(vii) the title of the Notes shall be "6%Senior Notes, Series D, Due 2032";
(viii) the form of the Notes shall be as set forth in Paragraph 1 above;
(ix) not applicable;
(x) the Notes shall be subject to a Periodic Offering; provided, however,
additional Notes issued pursuant to a Periodic Offering shall not have
the benefit of the Financial Guaranty Insurance Policy (as defined
herein) unless otherwise agreed by Ambac;
(xi) not applicable;
(xii)any other information necessary to complete the Notes shall be as set
forth in the Notes or herein;
(xiii) not applicable;
(xiv)the Notes shall be issuable in denominations of $25 and any integral
multiple thereof;
(xv) not applicable;
(xvi) the Notes shall not be issued as Discount Securities;
(xvii) not applicable;
(xviii) not applicable; and
(xix) not applicable.
3. To the extent permitted by law and so long as Ambac is in compliance with
its obligations under its Financial Guaranty Insurance Policy No. 20299BE
(the "Financial Guaranty Insurance Policy"), the Financial Guaranty
Insurance Policy is in full force and effect and Ambac is not subject to
any bankruptcy, insolvency or similar proceedings:
(i) any provision of this Company Order and Officer's Certificate, any
Note or the Indenture (collectively, the "Financing Documents")
expressly recognizing or granting rights in or to Ambac may not be
amended in any manner which affects the rights of Ambac hereunder or
thereunder without the prior written consent of Ambac.
(ii) Ambac shall be deemed to be the owner of all outstanding Notes for all
purposes (including, without limitation, all approvals, consents,
requests, waivers, authorizations, directions, inspections,
appointments and the institution of any action), provided, that
nothing in this clause (ii) shall impair the rights of the
Securityholders to receive all payments due under the Notes. Ambac's
consent shall be required with respect to (a) the execution and
delivery of any Company Order or supplemental indenture to the
Indenture for which the consent of any of the holders of the Notes
(the "Securityholders") is required, or any amendment, supplement or
change to or modification of any Financing Document (except as
otherwise provided by Section 901 of the Indenture) and (b) the
removal of the Trustee or any paying agent and selection and
appointment of any successor trustee or paying agent.
(iii)Any reorganization or liquidation plan under applicable bankruptcy
law or similar law with respect to the Company must be acceptable to
Ambac. In the event of any such reorganization or liquidation, Ambac
shall have the right to vote on behalf of all Securityholders who hold
Ambac-insured Notes absent a default by Ambac under the applicable
Financial Guaranty Insurance Policy insuring such Notes.
(iv) Anything in any Financing Document to the contrary notwithstanding,
upon the occurrence and continuance of an Event of Default, Ambac
shall be entitled to control and direct the enforcement of all rights
and remedies granted to the Securityholders or the Trustee for the
benefit of the Securityholders under the Financing Documents,
including, without limitation: (A) the right to accelerate the
principal of the Notes as described in the Indenture, and (B) the
right to annul any declaration of acceleration, and Ambac shall also
be entitled to approve all waivers of Events of Default with respect
to or effecting the Notes.
(v) While the Financial Guaranty Insurance Policy is in effect, the
Company (and/or the Trustee, where indicated below) shall furnish to
Ambac (to the attention of the Surveillance Department, unless
otherwise indicated):
(a) as soon as practicable after the filing thereof, a copy of any
financial statement of the Company and a copy of any audit and
annual report of the Company;
(b) such additional information it may reasonably request;
(c) a copy of any notice to be given to the registered
Securityholders, including, without limitation, notice of any
redemption or defeasance of the Notes, and any certificate
rendered pursuant to any Financing Document relating to the
Notes, which obligation shall bind the Trustee as well as the
Company;
(d) notice (attention: General Counsel) by the Trustee of any failure
of the Company to provide relevant notices, certificates, etc.
under the Financing Documents; and
(e) notwithstanding any other provision of any Financing Document,
immediate notice (attention: General Counsel) if at any time
there are insufficient moneys to make any payments of principal
and/or interest on the Notes as required and immediate notice of
the occurrence of any Event of Default, which obligation shall
bind the Trustee as well as the Company.
(vi) Notwithstanding anything herein or in any other Financing Document to
the contrary, in the event that the principal and/or interest due on
the Notes shall be paid by Ambac pursuant to the Financial Guaranty
Insurance Policy, (a) the Notes shall remain "outstanding" for all
purposes under the Indenture, not be considered defeased or otherwise
satisfied and not be considered paid by the Company, (b) except as
expressly stated herein or otherwise agreed or undertaken (I) the
Paying Agent, if any, shall have no duties or obligations relating to
any payments made by Ambac and (II) the Trustee shall not be deemed to
have knowledge of any default unless the Trustee shall have written
notice thereof, (c) the assignment and pledge of the Indenture and all
covenants, agreements and other obligations of the Company to the
Securityholders shall continue to exist and shall run to the benefit
of Ambac, and (d) Ambac shall be subrogated to the rights of such
Securityholders to the extent of such payment.
(vii)As long as the Financial Guaranty Insurance Policy shall be in full
force and effect, the Company, the Trustee and any Paying Agent agree
to comply with the following provisions:
(a) at least one (1) day prior to all Interest Payment Dates the
Trustee or Paying Agent, if any, will determine whether there
will be sufficient funds available to pay the principal of or
interest on the Notes on such Interest Payment Date. If the
Trustee or Paying Agent, if any, determines that there will be
insufficient funds available, the Trustee or Paying Agent, if
any, shall so notify Ambac. Such notice shall specify the amount
of the anticipated deficiency, the Notes to which such deficiency
is applicable and whether such Notes will be deficient as to
principal or interest, or both. If the Trustee or Paying Agent,
if any, has not so notified Ambac at least one (1) day prior to
an Interest Payment Date, Ambac will make payments of principal
or interest due on the Notes on or before the first (1st) day
next following the date on which Ambac shall have received notice
of nonpayment from the Trustee or Paying Agent, if any.
(b) the Trustee or Paying Agent, if any, shall, after giving notice
to Ambac as provided in (a) above, make available to Ambac and,
at Ambac's direction, to The Bank of New York, in New York, New
York, as insurance trustee for Ambac or any successor insurance
trustee (the "Insurance Trustee"), the registration books of the
Company maintained by the Trustee or Paying Agent, if any, and
all records relating to the funds and accounts (if any)
maintained under the Indenture.
(c) the Trustee or Paying Agent, if any, shall provide Ambac and the
Insurance Trustee with a list of registered owners of Notes
entitled to receive principal or interest payments from Ambac
under the terms of the Financial Guaranty Insurance Policy, and
shall pursuant to arrangements with the Insurance Trustee (I)
mail checks or drafts to the registered owners of Notes entitled
to receive full or partial interest payments from Ambac and (II)
pay principal upon Notes surrendered to the Insurance Trustee by
the registered owners of Notes entitled to receive full or
partial principal payments from Ambac.
(d) the Trustee or Paying Agent, if any, shall, at the time it
provides notice to Ambac pursuant to (a) above, notify registered
owners of Notes entitled to receive the payment of principal or
interest thereon from Ambac (I) as to the fact of such
entitlement, (II) that Ambac will remit to them, through the
Insurance Trustee or pursuant to arrangements made with the
Insurance Trustee through the Trustee or Paying Agent, if any,
all or a part of the interest payments next coming due upon proof
of Securityholder entitlement to interest payments and delivery
to the Insurance Trustee, in form satisfactory to the Insurance
Trustee, of an appropriate assignment of the registered owner's
right to payment, (III) that should they be entitled to receive
full payment of principal from Ambac, they must surrender their
Notes (along with an appropriate instrument of assignment in form
satisfactory to the Insurance Trustee to permit ownership of such
Notes to be registered in the name of Ambac) for payment to the
Insurance Trustee, who shall then pass such Notes on to the
Trustee or Paying Agent, if any, for payment of principal upon
such Notes and (IV) that should they be entitled to receive
partial payment of principal from Ambac, for payment of principal
on such Notes they must surrender their Notes for payment thereon
first to the Trustee or Paying Agent, if any, who shall note on
such Notes the portion of the principal paid by the Trustee or
Paying Agent, if any, and then, along with an appropriate
instrument of assignment in form satisfactory to the Insurance
Trustee, to the Insurance Trustee, which will then make
arrangements with the Trustee or the Paying Agent, if any, for
the payment of the unpaid portion of principal.
(e) in the event that the Trustee or Paying Agent, if any, has notice
that any payment of principal of or interest on a Note which has
become Due for Payment (as defined in the Financial Guaranty
Insurance Policy) and which is made to a Securityholder by or on
behalf of the Company has been deemed a preferential transfer and
theretofore recovered from its registered owner pursuant to the
United States Bankruptcy Code by a trustee in bankruptcy in
accordance with the final, nonappealable order of a court having
competent jurisdiction, the Trustee or Paying Agent, if any,
shall, at the time Ambac is notified pursuant to (a) above,
notify all registered owners that in the event that any
registered owner's payment is so recovered, such registered owner
will be entitled to payment from Ambac to the extent of such
recovery if sufficient funds are not otherwise available, and the
Trustee or Paying Agent, if any, shall furnish to Ambac its
records evidencing the payments of principal of and interest on
the Notes which have been made by the Trustee or Paying Agent, if
any, and subsequently recovered from registered owners and the
dates on which such payments were made.
(f) in addition to those rights granted Ambac under the Financing
Documents, Ambac shall, to the extent it makes payment of
principal of or interest on Notes, become subrogated to the
rights of the recipients of such payments in accordance with the
terms of the Financial Guaranty Insurance Policy, and to evidence
such subrogation (1) in the case of subrogation as to claims for
past due interest, the Trustee or Paying Agent, if any, shall
note Ambac's rights as subrogee on the registration books of the
Company maintained by the Trustee or Paying Agent, if any, upon
receipt from Ambac of proof of the payment of interest thereon to
the registered owners of the Notes, and (2) in the case of
subrogation as to claims for past due principal, the Trustee or
Paying Agent, if any, shall note Ambac's rights as subrogee on
the registration books of the Company maintained by the Trustee
or Paying Agent, if any, upon surrender of the Notes by the
registered owners thereof together with proof of the payment of
principal thereof.
(viii) The Trustee or Paying Agent, if any, may be removed at any time, at
the request of Ambac, for any breach of its obligations under the
Financing Documents.
(ix) Ambac shall receive prior written notice of any Trustee (or Paying
Agent) resignation.
(x) Every successor Trustee appointed pursuant to the Indenture shall be a
trust company or bank in good standing located in or incorporated
under the laws of any State of the United States of America, duly
authorized to exercise trust powers and subject to examination by
federal or state authority, having a reported capital and surplus of
not less than $75,000,000 and acceptable to Ambac. Any successor
Paying Agent, if applicable, shall not be appointed unless Ambac
approves such successor in writing.
(xi) Notwithstanding any other provision of the Financing Documents, in
determining whether the rights of the Securityholders will be
adversely affected by any action taken pursuant to the terms and
provisions of the Financing Documents, the Trustee (or Paying Agent)
shall consider the effect on the Securityholders as if there were no
Financial Guaranty Insurance Policy.
(xii)Notwithstanding any other provision of the Financing Documents, no
removal, resignation or termination of the Trustee (or Paying Agent)
shall take effect until a successor, acceptable to Ambac, shall be
appointed.
(xiii) To the extent that the Financing Documents confer upon or give or
grant to Ambac any right, remedy or claim thereunder or by reason
thereof, Ambac is hereby explicitly recognized as being a third-party
beneficiary thereunder and may enforce any such right remedy or claim
conferred, given or granted thereunder.
(xiv)Nothing in the Financing Documents, expressed or implied, is intended
or shall be construed to confer upon, or to give or grant to, any
person or entity, other than the Company, the Trustee, Ambac, the
Paying Agent, if any, and the registered Securityholders, any right,
remedy or claim under or by reason of the Financing Documents or any
covenant, condition or stipulation thereof, and all covenants,
stipulations, promises and agreements in the Financing Documents
contained by and on behalf of the Company shall be for the sole and
exclusive benefit of the Company, the Trustee, Ambac, the Paying
Agent, if any, and the registered Securityholders.
(xv) The Company may not elect to defease the Notes in accordance with
Article XI of the Indenture without having obtained the prior written
consent of Ambac, such consent not to be unreasonably withheld.
4. It shall be an Event of Default under the Indenture if an "Event of
Default" shall have occurred and be continuing under the Insurance
Agreement. If Ambac waives an Event of Default under the Insurance
Agreement or such Event of Default is cured, then such Event of Default
will not be an Event of Default with respect to the Senior Notes under the
Indenture.
5. You are hereby requested to authenticate $150,000,000 aggregate principal
amount of 6% Senior Notes, Series D, Due 2032 in such name as requested by
The Depository Trust Company ("DTC") in the Letter of Representations dated
November 19, 2002, from the Company and the Trustee to DTC in the manner
provided by the Indenture.
6. You are hereby requested to hold the Notes as custodian for DTC in
accordance with the Letter of Representations.
7. Concurrently with this Company Order, an Opinion of Counsel under Sections
2.04 and 13.06 of the Indenture is being delivered to you.
8. The undersigned Geoffrey S. Chatas and Thomas G. Berkemeyer, the Assistant
Treasurer and Assistant Secretary, respectively, of the Company do hereby
certify that:
(i) we have read the relevant portions of the Indenture, including without
limitation the conditions precedent provided for therein relating to
the action proposed to be taken by the Trustee as requested in this
Company Order and Officers' Certificate, and the definitions in the
Indenture relating thereto;
(ii) we have read the Board Resolutions of the Company and the Opinion of
Counsel referred to above;
(iii)we have conferred with other officers of the Company, have examined
such records of the Company and have made such other investigation as
we deemed relevant for purposes of this certificate;
(iv) in our opinion, we have made such examination or investigation as is
necessary to enable us to express an informed opinion as to whether or
not such conditions have been complied with; and
(v) on the basis of the foregoing, we are of the opinion that all
conditions precedent provided for in the Indenture relating to the
action proposed to be taken by the Trustee as requested herein have
been complied with.
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Kindly acknowledge receipt of this Company Order and Officers' Certificate,
including the documents listed herein, and confirm the arrangements set forth
herein by signing and returning the copy of this document attached hereto. By
signing below, the Trustee agrees to the terms and conditions set forth
hereinabove.
Very truly yours,
INDIANA MICHIGAN POWER COMPANY
By: /s/ Geoffrey S. Chatas
Vice President
And: /s/ Thomas G. Berkemeyer
Assistant Secretary
Acknowledged by Trustee:
By: /s/ Joseph A. Lloret
Authorized Signatory
Exhibit 1
Unless this certificate is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York, New York) to the issuer or
its agent for registration of transfer, exchange or payment, and any certificate
to be issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of The Depository Trust Company and
any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein. Except as otherwise provided
in Section 2.11 of the Indenture, this Security may be transferred, in whole but
not in part, only to another nominee of the Depository or to a successor
Depository or to a nominee of such successor Depository.
Financial Guaranty Insurance Policy No. 20299BE (the "Policy") with respect to
payments due for principal of and interest on this Note has been issued by Ambac
Assurance Corporation ("Ambac Assurance"). The Policy has been delivered to The
Bank of New York, New York, New York, as the Insurance Trustee under said Policy
and will be held by such Insurance Trustee or any successor insurance trustee.
The Policy is on file and available for inspection at the principal office of
the Insurance Trustee and a copy thereof may be secured from Ambac Assurance or
the Insurance Trustee. All payments required to be made under the Policy shall
be made in accordance with the provisions thereof. The owner of this Note
acknowledges and consents to the subrogation rights of Ambac Assurance as more
fully set forth in the Policy.
No. R-1 6,000,000 Senior Notes,
$25 principal amount each
INDIANA MICHIGAN POWER COMPANY
6% Senior Notes, Series D, Due 2032
CUSIP: 454889 77 5 Original Issue Date: November 22, 2002
Stated Maturity: December 31, 2032 Interest Rate: 6%
Principal Amount: $150,000,000
Redeemable: Yes __ No __
In Whole: Yes __ No __
In Part: Yes __ No __
Mandatory Redemption: At any time and at the redemption prices described herein
Initial Optional Redemption Date: November 22, 2007
Initial Optional RedemptionPrice: 100%
INDIANA MICHIGAN POWER COMPANY, a corporation duly organized and existing
under the laws of the State of Indiana (herein referred to as the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to CEDE & CO. or
registered assigns, the Principal Amount specified above on the Stated Maturity
specified above, and to pay interest on said Principal Amount from the Original
Issue Date specified above or from the most recent interest payment date (each
such date, an "Interest Payment Date") to which interest has been paid or duly
provided for, quarterly in arrears on March 31, June 30, September 30 and
December 31 in each year, commencing March 31, 2003, at the Interest Rate per
annum specified above, until the Principal Amount shall have been paid or duly
provided for. Interest shall be computed on the basis of a 360-day year of
twelve 30-day months.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date, as provided in the Indenture, as hereinafter defined,
shall be paid to the Person in whose name this Note (or one or more Predecessor
Securities) shall have been registered at the close of business on the Regular
Record Date with respect to such Interest Payment Date, which shall be the close
of business on the Business Day next preceding such Interest Payment Date. Any
such interest not so punctually paid or duly provided for shall forthwith cease
to be payable to the Holder on such Regular Record Date and shall be paid as
provided in said Indenture.
If any Interest Payment Date, any redemption date or the Stated Maturity is
not a Business Day, then payment of the amounts due on this Note on such date
will be made on the next succeeding Business Day, and no interest shall accrue
on such amounts for the period from and after such Interest Payment Date,
redemption date or Stated Maturity, as the case may be, except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, with the same force and effect as if
made on such date. The principal of (and premium, if any) and the interest on
this Note shall be payable at the office or agency of the Company maintained for
that purpose in the Borough of Manhattan, the City of New York, New York, in any
coin or currency of the United States of America which at the time of payment is
legal tender for payment of public and private debts; provided, however, that
payment of interest (other than interest payable on the Stated Maturity or any
redemption date) may be made at the option of the Company by check mailed to the
registered holder at such address as shall appear in the Note Register.
This Note is one of a duly authorized series of Notes of the Company
(herein sometimes referred to as the "Notes"), specified in the Indenture, all
issued or to be issued in one or more series under and pursuant to an Indenture
dated as of October 1, 1998 duly executed and delivered between the Company and
The Bank of New York, a national banking association organized and existing
under the laws of the United States, as Trustee (herein referred to as the
"Trustee") (such Indenture, as originally executed and delivered and as
thereafter supplemented and amended being hereinafter referred to as the
"Indenture"), to which Indenture and all indentures supplemental thereto or
Company Orders reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Notes. By the terms of the
Indenture, the Notes are issuable in series which may vary as to amount, date of
maturity, rate of interest and in other respects as in the Indenture provided.
This Note is one of the series of Notes designated on the face hereof.
Subject to the terms of Article Three of the Indenture, the Company shall
have the right to redeem this Note at its option, without premium or penalty, in
whole or, in part, at any time on or after November 22, 2007, at a redemption
price equal to 100% of the principal amount redeemed plus any accrued but unpaid
interest to the date of such redemption. This Note shall be redeemable and at
the redemption prices to the extent set forth herein, in the Company Order and
in the Indenture upon not less than thirty, but not more than sixty, days
previous notice by mail to the registered owner.
To the extent permitted by law and so long as Ambac is in compliance with
its obligations under the Policy, the Policy is in full force and effect and
Ambac is not subject to any bankruptcy, insolvency or similar proceedings:
(i) any provision of this Note, the Company Order and Officer's
Certificate, or the Indenture (collectively, the "Financing
Documents") expressly recognizing or granting rights in or to Ambac
may not be amended in any manner which affects the rights of Ambac
hereunder or thereunder without the prior written consent of Ambac.
(ii) Ambac shall be deemed to be the owner of all outstanding Notes for all
purposes (including, without limitation, all approvals, consents,
requests, waivers, authorizations, directions, inspections,
appointments and the institution of any action), provided, that
nothing in this clause (ii) shall impair the rights of the
Securityholders to receive all payments due under the Notes. Ambac's
consent shall be required with respect to (a) the execution and
delivery of any Company Order or supplemental indenture to the
Indenture for which the consent of any of the holders of the Notes
(the "Securityholders") is required, or any amendment, supplement or
change to or modification of any Financing Document (except as
otherwise provided by Section 901 of the Indenture) and (b) the
removal of the Trustee or any paying agent and selection and
appointment of any successor trustee or paying agent.
(iii)Any reorganization or liquidation plan under applicable bankruptcy
law or similar law with respect to the Company must be acceptable to
Ambac. In the event of any such reorganization or liquidation, Ambac
shall have the right to vote on behalf of all Securityholders who hold
Ambac-insured Notes absent a default by Ambac under the applicable
Financial Guaranty Insurance Policy insuring such Notes.
(iv) Anything in any Financing Document to the contrary notwithstanding,
upon the occurrence and continuance of an Event of Default, Ambac
shall be entitled to control and direct the enforcement of all rights
and remedies granted to the Securityholders or the Trustee for the
benefit of the Securityholders under the Financing Documents,
including, without limitation: (A) the right to accelerate the
principal of the Notes as described in the Indenture, and (B) the
right to annul any declaration of acceleration, and Ambac shall also
be entitled to approve all waivers of Events of Default with respect
to or effecting the Notes.
(v) While the Financial Guaranty Insurance Policy is in effect, the
Company (and/or the Trustee, where indicated below) shall furnish to
Ambac (to the attention of the Surveillance Department, unless
otherwise indicated):
(a) as soon as practicable after the filing thereof, a copy of any
financial statement of the Company and a copy of any audit and
annual report of the Company;
(b) such additional information it may reasonably request;
(c) a copy of any notice to be given to the registered
Securityholders, including, without limitation, notice of any
redemption or defeasance of the Notes, and any certificate
rendered pursuant to any Financing Document relating to the
Notes, which obligation shall bind the Trustee as well as the
Company;
(d) notice (attention: General Counsel) by the Trustee of any failure
of the Company to provide relevant notices, certificates, etc.
under the Financing Documents; and
(e) notwithstanding any other provision of any Financing Document,
immediate notice (attention: General Counsel) if at any time
there are insufficient moneys to make any payments of principal
and/or interest on the Notes as required and immediate notice of
the occurrence of any Event of Default, which obligation shall
bind the Trustee as well as the Company.
(vi) Notwithstanding anything herein or in any other Financing Document to
the contrary, in the event that the principal and/or interest due on
the Notes shall be paid by Ambac pursuant to the Financial Guaranty
Insurance Policy, (a) the Notes shall remain "outstanding" for all
purposes under the Indenture, not be considered defeased or otherwise
satisfied and not be considered paid by the Company, (b) except as
expressly stated herein or otherwise agreed or undertaken (I) the
Paying Agent, if any, shall have no duties or obligations relating to
any payments made by Ambac and (II) the Trustee shall not be deemed to
have knowledge of any default unless the Trustee shall have written
notice thereof, (c) the assignment and pledge of the Indenture and all
covenants, agreements and other obligations of the Company to the
Securityholders shall continue to exist and shall run to the benefit
of Ambac, and (d) Ambac shall be subrogated to the rights of such
Securityholders to the extent of each such payment.
(vii)As long as the Financial Guaranty Insurance Policy shall be in full
force and effect, the Company, the Trustee and any Paying Agent agree
to comply with the following provisions:
(a) at least one (1) day prior to all Interest Payment Dates the
Trustee or Paying Agent, if any, will determine whether there
will be sufficient funds available to pay the principal of or
interest on the Notes on such Interest Payment Date. If the
Trustee or Paying Agent, if any, determines that there will be
insufficient funds available, the Trustee or Paying Agent, if
any, shall so notify Ambac. Such notice shall specify the amount
of the anticipated deficiency, the Notes to which such deficiency
is applicable and whether such Notes will be deficient as to
principal or interest, or both. If the Trustee or Paying Agent,
if any, has not so notified Ambac at least one (1) day prior to
an Interest Payment Date, Ambac will make payments of principal
or interest due on the Notes on or before the first (1st) day
next following the date on which Ambac shall have received notice
of nonpayment from the Trustee or Paying Agent, if any.
(b) the Trustee or Paying Agent, if any, shall, after giving notice
to Ambac as provided in (a) above, make available to Ambac and,
at Ambac's direction, to The Bank of New York, in New York, New
York, as insurance trustee for Ambac or any successor insurance
trustee (the "Insurance Trustee"), the registration books of the
Company maintained by the Trustee or Paying Agent, if any, and
all records relating to the funds and accounts (if any)
maintained under the Indenture.
(c) the Trustee or Paying Agent, if any, shall provide Ambac and the
Insurance Trustee with a list of registered owners of Notes
entitled to receive principal or interest payments from Ambac
under the terms of the Financial Guaranty Insurance Policy, and
shall pursuant to arrangements with the Insurance Trustee (I)
mail checks or drafts to the registered owners of Notes entitled
to receive full or partial interest payments from Ambac and (II)
pay principal upon Notes surrendered to the Insurance Trustee by
the registered owners of Notes entitled to receive full or
partial principal payments from Ambac.
(d) the Trustee or Paying Agent, if any, shall, at the time it
provides notice to Ambac pursuant to (a) above, notify registered
owners of Notes entitled to receive the payment of principal or
interest thereon from Ambac (I) as to the fact of such
entitlement, (II) that Ambac will remit to them, through the
Insurance Trustee or pursuant to arrangements made with the
Insurance Trustee through the Trustee or Paying Agent, if any,
all or a part of the interest payments next coming due upon proof
of Securityholder entitlement to interest payments and delivery
to the Insurance Trustee, in form satisfactory to the Insurance
Trustee, of an appropriate assignment of the registered owner's
right to payment, (III) that should they be entitled to receive
full payment of principal from Ambac, they must surrender their
Notes (along with an appropriate instrument of assignment in form
satisfactory to the Insurance Trustee to permit ownership of such
Notes to be registered in the name of Ambac) for payment to the
Insurance Trustee, who shall then pass such Notes on to the
Trustee or Paying Agent, if any, for payment of principal upon
such Notes and (IV) that should they be entitled to receive
partial payment of principal from Ambac, for payment of principal
on such Notes they must surrender their Notes for payment thereon
first to the Trustee or Paying Agent, if any, who shall note on
such Notes the portion of the principal paid by the Trustee or
Paying Agent, if any, and then, along with an appropriate
instrument of assignment in form satisfactory to the Insurance
Trustee, to the Insurance Trustee, which will then make
arrangements with the Trustee or the Paying Agent, if any, for
the payment of the unpaid portion of principal.
(e) in the event that the Trustee or Paying Agent, if any, has notice
that any payment of principal of or interest on a Note which has
become Due for Payment (as defined in the Financial Guaranty
Insurance Policy) and which is made to a Securityholder by or on
behalf of the Company has been deemed a preferential transfer and
theretofore recovered from its registered owner pursuant to the
United States Bankruptcy Code by a trustee in bankruptcy in
accordance with the final, nonappealable order of a court having
competent jurisdiction, the Trustee or Paying Agent, if any,
shall, at the time Ambac is notified pursuant to (a) above,
notify all registered owners that in the event that any
registered owner's payment is so recovered, such registered owner
will be entitled to payment from Ambac to the extent of such
recovery if sufficient funds are not otherwise available, and the
Trustee or Paying Agent, if any, shall furnish to Ambac its
records evidencing the payments of principal of and interest on
the Notes which have been made by the Trustee or Paying Agent, if
any, and subsequently recovered from registered owners and the
dates on which such payments were made.
(f) in addition to those rights granted Ambac under the Financing
Documents, Ambac shall, to the extent it makes payment of
principal of or interest on Notes, become subrogated to the
rights of the recipients of such payments in accordance with the
terms of the Financial Guaranty Insurance Policy, and to evidence
such subrogation (1) in the case of subrogation as to claims for
past due interest, the Trustee or Paying Agent, if any, shall
note Ambac's rights as subrogee on the registration books of the
Company maintained by the Trustee or Paying Agent, if any, upon
receipt from Ambac of proof of the payment of interest thereon to
the registered owners of the Notes, and (2) in the case of
subrogation as to claims for past due principal, the Trustee or
Paying Agent, if any, shall note Ambac's rights as subrogee on
the registration books of the Company maintained by the Trustee
or Paying Agent, if any, upon surrender of the Notes by the
registered owners thereof together with proof of the payment of
principal thereof.
(viii) The Trustee or Paying Agent, if any, may be removed at any time, at
the request of Ambac, for any breach of its obligations under the
Financing Documents.
(ix) Ambac shall receive prior written notice of any Trustee (or Paying
Agent) resignation.
(x) Every successor Trustee appointed pursuant to the Indenture shall be a
trust company or bank in good standing located in or incorporated
under the laws of any State of the United States of America, duly
authorized to exercise trust powers and subject to examination by
federal or state authority, having a reported capital and surplus of
not less than $75,000,000 and acceptable to Ambac. Any successor
Paying Agent, if applicable, shall not be appointed unless Ambac
approves such successor in writing.
(xi) Notwithstanding any other provision of the Financing Documents, in
determining whether the rights of the Securityholders will be
adversely affected by any action taken pursuant to the terms and
provisions of the Financing Documents, the Trustee (or Paying Agent)
shall consider the effect on the Securityholders as if there were no
Financial Guaranty Insurance Policy.
(xii)Notwithstanding any other provision of the Financing Documents, no
removal, resignation or termination of the Trustee (or Paying Agent)
shall take effect until a successor, acceptable to Ambac, shall be
appointed.
(xiii) To the extent that the Financing Documents confer upon or give or
grant to Ambac any right, remedy or claim thereunder or by reason
thereof, Ambac is hereby explicitly recognized as being a third-party
beneficiary thereunder and may enforce any such right remedy or claim
conferred, given or granted thereunder.
(xiv)Nothing in the Financing Documents, expressed or implied, is intended
or shall be construed to confer upon, or to give or grant to, any
person or entity, other than the Company, the Trustee, Ambac, the
Paying Agent, if any, and the registered Securityholders, any right,
remedy or claim under or by reason of the Financing Documents or any
covenant, condition or stipulation thereof, and all covenants,
stipulations, promises and agreements in the Financing Documents
contained by and on behalf of the Company shall be for the sole and
exclusive benefit of the Company, the Trustee, Ambac, the Paying
Agent, if any, and the registered Securityholders.
(xv) The Company may not elect to defease the Notes in accordance with
Article XI of the Indenture without having obtained the prior written
consent of Ambac, such consent not to be unreasonably withheld.
It shall be an Event of Default under the Indenture if an "Event of
Default" shall have occurred and be continuing under the Insurance Agreement,
dated as of November 22, 2002, between the Company and Ambac. If Ambac waives an
Event of Default under the Insurance Agreement or such Event of Default is
cured, then such Event of Default will not be an Event of Default with respect
to the Senior Notes under the Indenture.
The Company shall not be required to (i) issue, exchange or register the
transfer of any Notes during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of less than all
the outstanding Notes of the same series and ending at the close of business on
the day of such mailing, nor (ii) register the transfer of or exchange of any
Notes of any series or portions thereof called for redemption. This Global Note
is exchangeable for Notes in definitive registered form only under certain
limited circumstances set forth in the Indenture.
In the event of redemption of this Note in part only, a new Note or Notes
of this series, of like tenor, for the unredeemed portion hereof will be issued
in the name of the Holder hereof upon the surrender of this Note.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Notes may be declared,
and upon such declaration shall become, due and payable, in the manner, with the
effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions for defeasance at any time of the entire
indebtedness of this Note upon compliance by the Company with certain conditions
set forth therein.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Notes of each series affected at the time outstanding,
as defined in the Indenture, to execute supplemental indentures for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or of modifying in
any manner the rights of the Holders of the Notes; provided, however, that no
such supplemental indenture shall (i) extend the fixed maturity of any Notes of
any series, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon, or reduce any premium payable upon the
redemption thereof, or reduce the amount of the principal of a Discount Security
that would be due and payable upon a declaration of acceleration of the maturity
thereof pursuant to the Indenture, without the consent of the holder of each
Note then outstanding and affected; (ii) reduce the aforesaid percentage of
Notes, the holders of which are required to consent to any such supplemental
indenture, or reduce the percentage of Notes, the holders of which are required
to waive any default and its consequences, without the consent of the holder of
each Note then outstanding and affected thereby; or (iii) modify any provision
of Section 6.01(c) of the Indenture (except to increase the percentage of
principal amount of securities required to rescind and annul any declaration of
amounts due and payable under the Notes), without the consent of the holder of
each Note then outstanding and affected thereby. The Indenture also contains
provisions permitting the Holders of a majority in aggregate principal amount of
the Notes of all series at the time outstanding affected thereby, on behalf of
the Holders of the Notes of such series, to waive any past default in the
performance of any of the covenants contained in the Indenture, or established
pursuant to the Indenture with respect to such series, and its consequences,
except a default in the payment of the principal of or premium, if any, or
interest on any of the Notes of such series. Any such consent or waiver by the
registered Holder of this Note (unless revoked as provided in the Indenture)
shall be conclusive and binding upon such Holder and upon all future Holders and
owners of this Note and of any Note issued in exchange herefor or in place
hereof (whether by registration of transfer or otherwise), irrespective of
whether or not any notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Note at the time and place and at the rate and in the money
herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, this Note is transferable by the registered holder hereof on the Note
Register of the Company, upon surrender of this Note for registration of
transfer at the office or agency of the Company as may be designated by the
Company accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company or the Trustee duly executed by the registered
Holder hereof or his or her attorney duly authorized in writing, and thereupon
one or more new Notes of authorized denominations and for the same aggregate
principal amount and series will be issued to the designated transferee or
transferees. No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Note, the
Company, the Trustee, any paying agent and any Note Registrar may deem and treat
the registered Holder hereof as the absolute owner hereof (whether or not this
Note shall be overdue and notwithstanding any notice of ownership or writing
hereon made by anyone other than the Note Registrar) for the purpose of
receiving payment of or on account of the principal hereof and premium, if any,
and interest due hereon and for all other purposes, and neither the Company nor
the Trustee nor any paying agent nor any Note Registrar shall be affected by any
notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Note, or for any claim based hereon, or otherwise in respect
hereof, or based on or in respect of the Indenture, against any incorporator,
stockholder, officer or director, past, present or future, as such, of the
Company or of any predecessor or successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance hereof and as
part of the consideration for the issuance hereof, expressly waived and
released.
The Notes of this series are issuable only in registered form without
coupons in denominations of $25 and any integral multiple thereof. As provided
in the Indenture and subject to certain limitations, Notes of this series are
exchangeable for a like aggregate principal amount of Notes of this series of a
different authorized denomination, as requested by the Holder surrendering the
same.
All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
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This Note shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.
IN WITNESS WHEREOF, the Company has caused this Instrument to be executed.
INDIANA MICHIGAN POWER COMPANY
By:___________________________
Vice President
Attest:
By:___________________________
Assistant Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series of Notes designated in accordance
with, and referred to in, the within-mentioned Indenture.
Dated: November 22, 2002
THE BANK OF NEW YORK, as Trustee
By:___________________________
Authorized Signatory
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
(PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE)
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(PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF
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ASSIGNEE) the within Note and all rights thereunder, hereby
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irrevocably constituting and appointing such person attorney to
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transfer such Note on the books of the Issuer, with full
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power of substitution in the premises.
Dated:________________________ _________________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within Note in every particular, without
alteration or enlargement or any change whatever and NOTICE: Signature(s)
must be guaranteed by a financial institution that is a member of the
Securities Transfer Agents Medallion Program ("STAMP"), the Stock Exchange
Medallion Program ("SEMP") or the New York Stock Exchange, Inc. Medallion
Signature Program ("MSP").