EXHIBIT 4(e)
December 12, 2002
Company Order and Officers' Certificate
4.368% Senior Notes, Series C, Due 2007
Deutsche Bank Trust Company Americas, As Trustee
100 Plaza One - MSJCY03-0604
Jersey City, NJ 07310
Attn: Corporate Trust Division
Ladies and Gentlemen:
Pursuant to Article Two of the Indenture, dated as of September 1, 1997 (as it
may be amended or supplemented, the "Indenture"), from Kentucky Power Company
(the "Company") to Deutsche Bank Trust Company Americas, as trustee (the
"Trustee"), and the Board Resolutions dated April 22, 2002, 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 4.368% Senior Notes, Series C, Due 2007 (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 $69,564,000, except
as contemplated in Section 2.01(i) of the Indenture;
(ii) the Maturity Date (as defined in the Indenture) of the Notes shall be
December 12, 2007;
(iii)interest shall accrue from December 10, 2002; the Interest Payment
Dates on which such interest will be payable shall be June 10 and
December 10, and the Regular Record Date for the determination of
Holders (as defined below) to whom interest is payable on any such
Interest Payment Date shall be the May 26 or November 26, as the case
may be, next preceding such Interest Payment Date; provided however
that if the Original Issue Date of a Note shall be after a Regular
Record Date and before the corresponding Interest Payment Date,
payment of interest shall commence on the second Interest Payment Date
succeeding such Original Issue Date and shall be paid to the Person in
whose name this Note was registered on the Regular Record Date for
such second Interest Payment Date; and provided further, 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 or rates at which the Notes, or any Tranche thereof,
shall bear interest shall be 4.368%;
(v) the terms in addition to those contained in the Indenture regarding
the redemption, purchase or repayment of such series, shall be set
forth in Section 4 hereof and in the Note;
(vi) (a) the Notes shall not be issued in the form of a Global Note; and
(b) the procedures with respect to transfer and exchange of Notes
shall be as set forth in the form of Note attached hereto;
(vii)the title of the Notes shall be "4.368% Senior Notes, Series C, Due
2007";
(viii) the form of the Notes shall be as set forth in Paragraph 1 above;
(ix) the maximum interest rate of the Notes shall not exceed by 3.0% the
yield to maturity at the date of pricing on United States Treasury
Bonds of comparable maturity;
(x) the Notes shall not be subject to a Periodic Offering;
(xi) not applicable;
(xii)any other information necessary to complete the Notes shall be set
forth in the Note or herein;
(xiii) not applicable;
(xiv) not applicable;
(xv) not applicable;
(xvi) the Notes shall not be issued as Discount Securities;
(xvii) not applicable;
(xviii) not applicable; and
(xix) not applicable.
3. (i) The Notes shall constitute direct, unsubordinated and unsecured
obligations of the Company.
(ii) The Notes shall rank equally among themselves and at least equally
with all other unsecured obligations of the Company, except for
liabilities mandatorily preferred by law.
4.
(i) The Company may redeem all (but not some only) of the Notes of a
Series in whole on an Interest Payment Date before their Maturity Date
at their Early Redemption Amount (as defined below) if the Company has
or will become required to increase
(a) the amount of a payment in respect of a Note under Section 6(ii)
below; or
(b) the amount of a payment to Ambac Assurance under the Insurance
Agreement (as defined below).
(ii) The Company shall redeem all (but not some only) of the Notes of a
Series if:
(a) a law of any State, a federal law, or rule or regulation of any
governmental agency requires the reorganization of the Company or
the transfer of all or a substantial portion of its assets; and
(b) following such reorganization or transfer, all or a substantial
portion of the business of the Company will be unregulated with
respect to the rates it is entitled to charge its customers.
5. If the Company elects or is obligated to redeem all of the Notes of a
Series under Section 4:
(i) the Company must give at least 30 days' (and no more than 60 days')
notice to the Security Registrar, the registered holders of the Notes
(the "Holders"), Ambac Assurance Corporation, a Wisconsin-domiciled
stock insurance company ("Ambac Assurance") and Ambac Financial
Services, L.P.;
(ii) before the Company gives such notice, the Company shall deliver to the
Security Registrar:
(a) a certificate signed by two authorized officers of the Company;
and
(b) an opinion of independent legal counsel of recognized standing of
the Company (which may be Simpson Thacher & Bartlett), that the
Company is entitled or obliged (as the case may be) to effect the
aforementioned redemption;
(iii)the amount payable by the Company on redemption at any time before the
Maturity Date of any Notes of a Series is an amount (the "Early
Redemption Amount") equal to the sum of:
(a) the aggregate outstanding principal amount, and any interest
accrued, on those Notes to and including the date of redemption;
(b) the aggregate of any additional amounts which the Holder is
required to pay under any related swap transaction between the
Holder and Ambac Financial Services LP (or a substitute swap
counterparty under a swap transaction entered into in
substitution of that related swap transaction) in consequence of
such redemption by the Company (as notified to the Holder and the
Company by Ambac Financial Services LP); and
(c) the US$ equivalent of the aggregate of any additional amounts
which the Holder is required to pay to any investor in the Holder
in order to enable it to discharge fully any early redemption
amount payable by such investor, on any debt securities issued by
it, in consequence of such redemption by the Company (as notified
to the Holder and the Company by such investor).
(iv) Any notice of redemption given under this section is irrevocable, and
the Company must redeem all of the Notes of the relevant Series on the
Interest Payment date specified in the notice delivered pursuant to
this Section 5.
(v) The Company and any of its subsidiaries may at any time purchase Notes
in the open market or otherwise and at any price. If purchases are
made by tender, tenders must be available to all Holders alike.
(vi) All Notes redeemed by the Company or purchased by or on behalf of the
Company or any of its subsidiaries under this section must be
cancelled immediately.
6. With respect to certain taxes that may be applicable to the Notes:
(i) Payments in respect of principal and interest are subject in all cases
to applicable provisions of any applicable laws and regulations. All
payments in respect of the Notes must be made in full without set-off
or counterclaim, and without any withholding or deduction in respect
of taxes unless required by law.
(ii) Subject to the following paragraph, if a law requires the Company to
withhold or deduct an amount in respect of taxes from a payment in
respect of the Notes such that the Holder would not actually receive
on the due date the full amount provided for under the Notes, then:
(a) the Company agrees to deduct the amount for the taxes (and any
further withholding or deduction applicable to any further
payment due under paragraph (b) below); and
(b) if the amount deducted or withheld is in respect of taxes imposed
by the United States ("US Tax"), the amount payable is increased
so that, after making the deduction and further deductions
applicable to any additional amounts payable by the Company under
this section ("Additional Amounts"), each Holder who is a "Non-US
Holder" (as defined below) is entitled to receive (at the time
the payment is due) the amount it would have received if no
deductions had been required.
(iii)The Company is not required to pay an Additional Amount under this
section if the obligation to do so arises as a result of any one or
more of the following:
(a) any US Tax which would not have been imposed on the Non-US Holder
but for:
(1) the existence of any present or former connection between
such Non-US Holder (or between an agent, fiduciary, settlor,
beneficiary, member, or shareholder of, or possessor of a
power over, such Non-US Holder (each, an "Attribution
Person")) and the United States, including, but not limited
to, such Non-US Holder (or an Attribution Person) being or
having been present in the United States, being or having
been a citizen or resident thereof, being or having been
engaged in a trade or business therein or having or having
had a permanent establishment therein;
(2) the failure of such Non-US Holder or any Attribution Person
to comply with any certification, identification or
information reporting requirements under the income tax laws
and regulations of the United States or any political
subdivision or taxing authority thereof or therein necessary
to establish entitlement to relief or an exemption from
withholding or;
(3) the presentation of a Note for payment after a specified
time period;
(b) any estate, inheritance, gift, sales, transfer, excise, personal
property, or any similar US Tax;
(c) any US Tax that is payable other than by withholding or
deduction;
(d) with respect to a Non-US Holder other than ACE Funding American
Electric Power Subsidiaries Series 2002-2 MTN Trust (the "Trust")
or the holder of the Trust's investor unit, any US Tax imposed by
reason of such Non-US Holder's or any Attribution Person's past
or present status as a "passive foreign investment company",
"personal holding company", "foreign personal holding company" or
"controlled foreign corporation" within the meaning of the United
States federal income tax laws, or as a corporation that is
subject to the "accumulated earning tax" within the meaning of
such laws;
(e) with respect to a Non-US Holder other than the Trust or the
holder of the Trust's investor unit, any US Tax imposed by reason
of such Non-US Holder's or any Attribution Person's past or
present status as a bank making a loan in the ordinary course of
its business;
(f) with respect to a Non-US Holder other than the Trust or the
holder of the Trust's investor unit, any US Tax imposed on
interest received by or deemed received by (1) a 10% shareholder
(as defined in Section 871(h)(3)(B) of the Internal Revenue Code
and the regulations that may be promulgated thereunder) of the
Company or (2) a "controlled foreign corporation" with respect to
the Company within the meaning of the Internal Revenue Code;
(g) any combination of items (a), (b), (c), (d), (e) or (f); or
(h) any tax that is not a US tax.
(iv) In addition, Additional Amounts will not be paid with respect to any
Note to a person that is not the beneficial owner thereof of such Note
to the extent that the beneficial owner thereof would not have been
entitled to the payment of such Additional Amounts had such beneficial
owner been the legal holder of such Note.
(v) In this section:
Non-US Holder means:
(A) an individual who is a non-resident alien from the perspective of
United States Federal income tax ("USFIT") law who has not become
generally subject to USFIT by virtue of extensive physical
presence in the United States ("US");
(B) a corporation - or entity taxable as a corporation for USFIT
purposes - organised or created under non-US law;
(C) an estate that is not taxable in the US on its worldwide income;
or
(D) a trust if:
(I) no court within the US is able to exercise primary
jurisdiction over its administration; or
(II) no US person nor combination of US persons has the authority
to control all its substantial decisions.
(vi) Each Non-US Holder shall deliver or cause to be delivered to the
Company and Ambac Assurance, a properly completed and duly executed
U.S. Internal Revenue Service ("IRS") Form W-8BEN (or any successor
thereto) on behalf of itself and, with respect to the Trust, on behalf
of the holder of its investor unit on or before the date it becomes a
Holder. In addition, each Non-US Holder shall deliver or cause to be
delivered to the Company and Ambac Assurance such IRS Forms W-8BEN
promptly upon or before the expiration, obsolescence or invalidity of
any such documents previously delivered by such Non-US Holder. A
Non-US Holder that provides IRS Forms W-8BEN without a taxpayer
identification number must provide a new form upon the expiration of
every third succeeding calendar year. Each Non-US Holder providing
forms or certificates pursuant to this paragraph (vi) hereby
represents, covenants and warrants the accuracy of the information
provided therein.
(vii)The Company shall not be required to pay any Additional Amounts to
any Non-US Holder under this Section 6 to the extent that the
obligation to pay such Additional Amounts would not have arisen but
for a failure by such Non-US Holder to comply with the provisions of
paragraph (vi) above.
7. For purposes of the Notes of this Series:
(i) The term "Business Day" shall mean only those Business Days (as
defined in the Indenture on which commercial banks and foreign
exchange markets are open to settle payments and for general business
in New York. If any payment is scheduled to be made on a day that is
not a Business Day, such payment will be made on the immediately
preceding Business Day.
(ii) For the purpose of Section 6.01 (a)(1)-(3) of the Indenture and
notwithstanding anything therein to the contrary, the Company shall be
entitled to no more than two Business Days with respect to any
continuance of default or period in which to remedy a default after
receipt of a Notice of Default, as the case may be, before such event
becomes an Event of Default.
(iii)In addition to the provisions governing transfer of notes set forth
in Section 2.05 of the Indenture, the following provisions shall also
be applicable to the Notes:
(a) Except with respect to Ambac Assurance, Notes may only be
transferred within, to or from Australia if the aggregate
consideration payable by the transferee at the time of transfer
is at least A$500,000 (disregarding moneys lent by the transferor
or its associates to the transferee) or the offer or invitation
giving rise to the transfer does not constitute an offer or
invitation for which disclosure is required to be made to
investors under Part 6D.2 of the Corporations Act 2001 of
Australia.
(b) (A) Any Note issued prior to the forty day restricted period as
defined in Regulation S promulgated under the Securities Act of
1933, as amended (the "Restricted Period"), shall bear the
following legend:
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. THE HOLDER OF
THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT DURING
THE FORTY DAY RESTRICTED PERIOD (AS DEFINED IN REGULATION S OF THE SECURITIES
ACT) SUCH SECURITY MAY BE RESOLD, PLEDGED OR TRANSFERRED ONLY (A) OUTSIDE THE
UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 904 UNDER THE SECURITIES ACT OR (B) TO AMBAC ASSURANCE AFTER THE OCCURRENCE
OF AN EVENT OF DEFAULT IF AMBAC ASSURANCE PROMPTLY NOTIFIES THE COMPANY OR ITS
PAYING AGENT OF SUCH RESALE, PLEDGE OR TRANSFER, AND THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH ABOVE. PRIOR TO ANY SUCH
TRANSFER, THE TRANSFEROR WILL FURNISH TO THE TRUSTEE SUCH CERTIFICATIONS, LEGAL
OPINIONS, OR OTHER INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING SO MADE.
(B) All Notes will bear the following legend:
ANY UNITED STATES PERSON WHO HOLDS THIS SECURITY WILL BE SUBJECT TO LIMITATIONS
UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN
SECTIONS 165(J) AND 1287(A) OF THE INTERNAL REVENUE CODE.
(c) Notes may not be transferred to persons that are "United States
persons" within the meaning of Section 7701(a)(30) of the
Internal Revenue Code (other than Ambac Assurance) and each
Holder, by acceptance of a Note, agrees that it is prohibited
from making such transfers.
(d) Neither the Notes nor any beneficial interest therein may be
offered, sold or otherwise transferred in the absence of
registration under the Securities Act or an applicable exemption
therefrom. The Holders shall not, during the forty day restricted
period as defined in Regulation S of the Securities Act, resell,
pledge or transfer such Notes or any beneficial interest therein
except (1) outside the United States to a person other than a
U.S. Person (as the term is defined in the Securities Act) in a
transaction meeting the requirements of Rule 904 under the
Securities Act or (2) to Ambac Assurance after the occurrence of
an Event of Default if Ambac Assurance promptly notifies the
Company or its paying agent of such resale, pledge or transfer,
and the Holder shall, and each subsequent Holder is required to,
notify any purchaser from it of the resale restrictions set forth
above. Prior to any such transfer, the transferor will furnish to
the Trustee such certifications, legal opinions, or other
information as the Company may reasonably require to confirm that
such transfer is being so made.
(e) Any request for the transfer of any Note during the Restricted
Period shall be accompanied by a certification signed by the
transferor in the form of Exhibit 2.
(iv) In addition to the limits contained in Section 9.02 of the Indenture,
no supplemental indenture set forth in the first paragraph of such
section, which may be adopted with the consent of the holders of not
less than a majority in the aggregate principal of the relevant
Securities, may change the time, currency or basis of calculation of
any amount payable, or of any associated definition.
(v) Any provision of this Company Order, any Note or the Indenture
(collectively, the "Financing Documents") expressly recognizing or
granting rights in or to Ambac Assurance may not be amended in any
manner which affects the rights of Ambac Assurance hereunder or
thereunder without the prior written consent of Ambac Assurance.
(vi) Any reorganization or liquidation plan under applicable bankruptcy or
similar law with respect to the Company must be acceptable to Ambac
Assurance. In the event of any such reorganization or liquidation,
Ambac Assurance shall have the right to vote on behalf of all Holders
who hold Ambac Assurance-insured Notes absent a default by Ambac
Assurance under the applicable Financial Guaranty Insurance Policy
insuring such Notes.
(vii)Ambac Assurance's consent shall, with respect to the Notes, be
required in addition to Holder consent, when required, for the
following purposes: (A) execution and delivery of any supplemental
indenture for which the consent of any of the Holders is required, or
any amendment, supplement or change to or modification of any
Financing Document (except as otherwise provided by Section 9.01 of
the Indenture), (B) removal of the Trustee or any paying agent and
selection and appointment of any successor trustee or paying agent;
and (C) initiation or approval of any action not described in (A) or
(B) above which requires Holder consent.
(viii) So long as the Financial Guaranty Insurance Policy issued by Ambac
Assurance in connection with the Notes in favor of the Holders (the
"Policy") is in effect with respect to the Notes, except for U.S.
federal, state and local income and franchise tax purposes, Ambac
Assurance 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 (viii) shall impair the rights of the Holders
to receive all payments due under the Notes. Anything in any Financing
Document to the contrary notwithstanding, upon the occurrence and
continuance of an Event of Default, Ambac Assurance shall be entitled
to control and direct the enforcement of all rights and remedies
granted to the Holders or the Trustee for the benefit of the Holders
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 Assurance shall also be entitled to approve all waivers of
Events of Default. The Company and each Holder by such Holder's
acquisition of a Note agree that for United States federal, state and
local income and franchise tax purposes (i) the Notes constitute
indebtedness of the Company, (ii) the Holders are the beneficial
owners of the Notes, and (iii) they will file their tax returns
consistent with such characterization.
(ix) While the Policy is in effect or the Reimbursement Obligations (as
defined below) remain unpaid, the Company (and/or the Trustee, where
indicated below) shall furnish to Ambac Assurance (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 owners of the
Notes, including, without limitation, notice of any redemption 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.
(x) The Company will permit Ambac Assurance to discuss the affairs,
finances and accounts of the Company, or any information Ambac
Assurance may reasonably request regarding the Notes, with appropriate
officers of the Company.
(xi) 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 Assurance pursuant to the Policy (i)
the Notes shall remain "outstanding" for all purposes, not be defeased
or otherwise satisfied and not be considered paid by the Company, (ii)
except as expressly stated herein, (A) the Paying Agent, if any, shall
have no duties or obligations relating to any payments made by Ambac
Assurance and (B) the Trustee shall not be deemed to have knowledge of
any default unless the Trustee shall have written notice of such
default, unless otherwise agreed, (iii) all covenants agreements and
other obligations of the Company to the Holders shall continue to
exist and shall run to the benefit of Ambac Assurance, and (iv) Ambac
Assurance shall be subrogated to the rights of such Holders.
(xii)As long as the 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 Assurance. 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 Assurance at least one
(1) day prior to an Interest Payment Date, Ambac Assurance 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
Assurance 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 Assurance as provided in (a) above, make available to
Ambac Assurance and, at Ambac Assurance's direction, to The Bank
of New York, in New York, New York, as insurance trustee for
Ambac Assurance 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 maintained under the
Indenture.
(c) the Trustee or Paying Agent, if any, shall provide Ambac
Assurance and the Insurance Trustee with a list of registered
owners of Notes entitled to receive principal or interest
payments from Ambac Assurance under the terms of the Policy, and
shall, pursuant to arrangements made 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
Assurance and (ii) to 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 Assurance.
(d) the Trustee or Paying Agent, if any, shall, at the time it
provides notice to Ambac Assurance pursuant to (a) above, notify
registered owners of Notes entitled to receive the payment of
principal or interest thereon from Ambac Assurance (1) as to the
fact of such entitlement, (2) that Ambac Assurance 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 Holder 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, (3) that should they be entitled to
receive full payment of principal from Ambac Assurance, 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 Assurance) 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 (4) that should they
be entitled to receive partial payment of principal from Ambac
Assurance, 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 Paying Agent, if any, for the
payment of the unpaid portion of principal upon such Notes.
(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 Policy) and which is
made to a Holder 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
Assurance 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 Assurance 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 Assurance 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 Assurance under the
Financing Documents, Ambac Assurance 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 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 Assurance's rights as subrogee on the registration books of
the Company maintained by the Trustee or Paying Agent, if any,
upon receipt from Ambac Assurance 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 Assurance'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.
(xiii) The Trustee or Paying Agent, if any, may be removed at any time, at
the request of Ambac Assurance, for any breach of its obligations
under the Financing Documents.
(xiv)Ambac Assurance shall receive prior written notice of any Trustee (or
Paying Agent) resignation.
(xv) 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 Assurance. Any
successor Paying Agent, if applicable, shall not be appointed unless
Ambac approves such successor in writing.
(xvi)Notwithstanding any other provision of the Financing Documents, in
determining whether the rights of the Holders 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 Holders as if there were no Policy.
(xvii) Notwithstanding any other provision of the Financing Documents,
while the Policy is outstanding or any Reimbursement Obligation
(defined below) remains unpaid, no removal, resignation or termination
of the Trustee (or Paying Agent) shall take effect until a successor,
acceptable to Ambac Assurance, shall be appointed.
(xviii) To the extent that the Financing Documents confer upon or give or
grant to Ambac Assurance any right, remedy or claim thereunder or by
reason thereof, Ambac Assurance 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.
(xix)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
Assurance, the Paying Agent, if any, and the registered owners of the
Notes, 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
Assurance, the Paying Agent, if any, and the registered owners of the
Notes.
(xx) Paragraphs (v)-(xix) of this Section shall only apply so long as Ambac
Assurance is not in default of the Policy or the Insurance Agreement
(as defined below).
(xxi)Section 4.02 and Article XI of the Indenture shall not apply to the
Notes.
(xxii) The term "Reimbursement Obligation" shall mean amounts payable by
the Company to Ambac Assurance pursuant to the terms of the Insurance
Agreement, dated as of December 5, 2002 (the "Insurance Agreement"),
between the Company and Ambac Assurance.
(xxiii) Title to the Notes will pass only by transfer and registration in
the Security Register.
(xxiv) Section 8.03 of the Indenture shall be amended for purposes of the
Notes to read:
Section 8.03. The Company, the Trustee, any paying agent and any
Security Registrar shall deem and treat the person in whose name such
Security shall be registered upon the Security Register as the
absolute owner of such Security (whether or not such Security shall be
overdue and notwithstanding any notice of ownership or writing thereon
made by anyone other than the Security Registrar) for the purpose of
receiving payment of or on account of the principal of and premium, if
any, and interest (including Defaulted Interest, if any) on such
Security and for all other purposes; and neither the Company nor the
Trustee nor any paying agent nor any Security Registrar shall be
affected by any notice to the contrary.
(xxv)No amounts paid to a Holder on the Notes may be credited to Holders'
bank accounts within the United States of America or its possessions,
and no Holder shall be entitled to make any demand for payment to the
Company or its paying agent within the United States of America or its
possessions; provided, however, that if the Company or its paying
agent receives notification from Ambac Assurance that Ambac Assurance
has acquired any Notes after the occurrence of an Event of Default,
payments on such Notes may be credited to a bank account in the United
States and Ambac Assurance may make demand for payment within the
United States.
8. 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.
9. You are hereby requested to authenticate, from time to time after the date
hereof and in the manner provided by the Indenture, such aggregate
principal amount of the Notes not to exceed $69,564,000 as shall be set
forth in the Note.
10. Concurrently with this Company Order, an Opinion of Counsel under Sections
2.04 and 13.06 of the Indenture is being delivered to you with respect to
the issuance and sale of up to $69,564,000 principal amount of Notes and,
prior to issuance thereof, a subsequent Opinion of Counsel will be
delivered to you with respect to the subsequent issuance and sale of Notes.
11. 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.
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 herein.
Very truly yours,
KENTUCKY POWER COMPANY
By: /s/ Geoffrey S. Chatas
Assistant Treasurer
And: /s/ Thomas G. Berkemeyer
Assistant Secretary
Acknowledged and Agreed to by Trustee:
By: /s/ Susan Johnson
Vice Presisdent
Exhibit 1
ANY UNITED STATES PERSON WHO HOLDS THIS SECURITY WILL BE SUBJECT TO LIMITATIONS
UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN
SECTIONS 165(J) AND 1287(A) OF THE INTERNAL REVENUE CODE.
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. THE HOLDER OF
THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT DURING
THE FORTY DAY RESTRICTED PERIOD (AS DEFINED IN REGULATION S OF THE SECURITIES
ACT) SUCH SECURITY MAY BE RESOLD, PLEDGED OR TRANSFERRED ONLY (A) OUTSIDE THE
UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 904 UNDER THE SECURITIES ACT OR (B) TO AMBAC ASSURANCE AFTER THE OCCURRENCE
OF AN EVENT OF DEFAULT IF AMBAC ASSURANCE PROMPTLY NOTIFIES THE COMPANY OR ITS
PAYING AGENT OF SUCH RESALE, PLEDGE OR TRANSFER, AND THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH ABOVE. PRIOR TO ANY SUCH
TRANSFER, THE TRANSFEROR WILL FURNISH TO THE TRUSTEE SUCH CERTIFICATIONS, LEGAL
OPINIONS, OR OTHER INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING SO MADE.
Financial Guaranty Insurance Policy No. SF0582BE (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. R1
KENTUCKY POWER COMPANY
4.368% Senior Note, Series C, Due 2007
Stated Maturity Date: December 12, 2007 Original Issue Date: December 12, 2002
Principal Amount: $69,564,000 Interest Rate: 4.368%
KENTUCKY POWER COMPANY, a corporation duly organized and existing under the
laws of the Commonwealth of Kentucky (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 ACE Funding American Electric
Power Subsidiaries Series 2002-2 MTN Trust or registered assigns, the Principal
Amount specified above on the Stated Maturity Date specified above, and to pay
interest on said Principal Amount from December 10, 2002 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, semi-annually in arrears on June 10
and December 10 in each year, commencing (except as provided in the following
sentence) with the Interest Payment Date next succeeding the Original Issue Date
specified above, 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 only 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 May 26 or November 26 (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date; provided however that if the
Original Issue Date of this Note shall be after a Regular Record Date and before
the corresponding Interest Payment Date, payment of interest shall commence on
the second Interest Payment Date succeeding such Original Issue Date and shall
be paid to the Person in whose name this Note was registered on the Regular
Record Date for such second Interest Payment Date; and provided further, that
interest payable on the Stated Maturity Date or any Redemption Date shall be
paid to the Person to whom principal shall be paid. 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 payment is scheduled to be made on a day that is not a Business Day,
such payment will be made on the immediately preceding Business Day. No amounts
paid to a Holder on the Notes may be credited to Holders' bank accounts within
the United States of America or its possessions, and no Holder shall be entitled
to make any demand for payment to the Company or its paying agent within the
United States of America or its possessions; provided, however, that if the
Company or its paying agent receives notification from Ambac Assurance
Corporation ("Ambac Assurance") that Ambac Assurance has acquired any Notes
after the occurrence of an Event of Default, payments on such Notes may be
credited to a bank account in the United States and Ambac Assurance may make
demand for payment within the United States.
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 September 1, 1997 duly executed and delivered between the Company
and Deutsche Bank Trust Company Americas, 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.
This Note shall be redeemable to the extent set forth in the Indenture and
relevant Company Order.
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 Tranche 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.
In the event of redemption of this Note in part only, a new Note or Notes
of this Series and Tranche, 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 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 effected 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 Company Order and subject to certain
limitations therein set forth, this Note is transferable by the registered
holder hereof on the Security 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. Under no circumstances
may this Note be transferred to a United States holder other than Ambac
Assurance Corporation.
The Company, the Trustee, any paying agent and any Security Registrar shall
deem and treat the registered Holder of this Note as the absolute owner of this
Note (whether or not this Note shall be overdue and notwithstanding any notice
of ownership or writing hereon made by anyone other than the Security 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 Security
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. As provided in the Indenture and subject to certain limitations, Notes
of this Series and Tranche are exchangeable for a like aggregate principal
amount of Notes of this Series and Tranche 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.
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.
Dated December 12, 2002
KENTUCKY POWER COMPANY
By:
-------------------------
Assistant Treasurer
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: December 12, 2002
DEUTSCHE BANK TRUST COMPANY AMERICAS
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)
- ---------------------------------------
- ----------------------------------------------------------------
- ----------------------------------------------------------------
(PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF
- ----------------------------------------------------------------
ASSIGNEE) the within Note and all rights thereunder, hereby
- ----------------------------------------------------------------
irrevocably constituting and appointing such person attorney to
- ----------------------------------------------------------------
transfer such Note on the books of the Company, with full
- ----------------------------------------------------------------
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").
Exhibit 2
FORM OF CERTIFICATION OF TRANSFEROR
Re: Kentucky Power Company 4.368% Senior Notes, Series C, Due 2007
Reference is hereby made to the Indenture, dated as of September 1, 1997
(the "Indenture"), between Kentucky Power Company (the "Company") and Deutsche
Bank Trust Company Americas, as trustee. Capitalized terms used but not defined
herein shall have the meanings given them in the Indenture.
_______________ (the "Transferor" owns and proposes to transfer the
attached Note in the principal amount of $________ in such Note (the
"Transfer"), to _____________ (the "Transferee"). In connection with the
Transfer, the Transferor hereby certifies that the Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the Securities
Act. The Transferor further certifies that the Transfer is being effected
outside of the United States and the Transferee is either Ambac Assurance
Corporation or is not a "United States person" within the meaning of Section
7701(a)(30) of the Internal Revenue Code.
This certification and the statements contained herein are made for the
benefit of the Company.
[NAME OF TRANSFEROR]
By:_______________________
Title:______________________
Dated:______________