EXHIBIT 4(b)
June 13, 2003
Company Order and Officers' Certificate
5.625% Senior Notes, Series D, due 2032
Deutsche Bank Trust Company Americas, as Trustee
Corporate Trust & Agency Services
280 Park Avenue, MS-NYC03-0914
New York, NY 10017
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 Bankers Trust Company, now 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 5.625% 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 shall
initially be authenticated and delivered under the Indenture
is $75,000,000, except as contemplated in Section 2.01(i) of
the Indenture;
(ii) the date on which the principal of the Notes shall be
payable shall be December 1, 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 June 1 and December 1, and the
Regular Record Date for the determination of holders to whom
interest is payable on any such Interest Payment Date shall be
the May 15 or November 15 preceding the relevant Interest
Payment Date; provided that the first Interest Payment Date
shall be December 1, 2003 and 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 5.625% per annum;
(v) the Notes shall be redeemable at the option of the
Company, in whole at any time or in part from time to time,
upon not less than thirty but not more than sixty days'
previous notice given by mail to the registered owners of the
Notes at a redemption price equal to the greater of (i) 100%
of the principal amount of the Notes being redeemed and (ii)
the sum of the present values of the remaining scheduled
payments of principal and interest on the Notes being redeemed
(excluding the portion of any such interest accrued to the
date of redemption) discounted (for purposes of determining
present value) to the redemption date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months)
at the Treasury Rate (as defined below) plus 30 basis points,
plus, in each case, accrued interest thereon to the date of
redemption.
"Treasury Rate" means, with respect to any redemption date,
the rate per annum equal to the semi-annual equivalent yield
to maturity of the Comparable Treasury Issue, assuming 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.
"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
Notes 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 Notes.
"Comparable Treasury Price" means, with respect to any
redemption date, (i) the average of the bid and asked prices
for the Comparable Treasury Issue (expressed in each case a
percentage of its principal amount) on the third Business Day
preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by
the Federal Reserve Bank of New York and designated "Composite
3:30 p.m. Quotations for U. S. Government Securities" or (ii)
if such release (or any successor release) is not published or
does not contain such prices on such third Business Day, the
Reference Treasury Dealer Quotation for such redemption date.
"Independent Investment Banker" means one of the Reference
Treasury Dealers appointed by the Company and reasonably
acceptable to the Trustee.
"Reference Treasury Dealer" means a primary U.S. government
securities dealer in New York City selected by the Company and
reasonably acceptable to the Trustee.
"Reference Treasury Dealer Quotation" means, with respect to
the Reference Treasury Dealer and any redemption date, the
average, as determined by the Trustee, 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 Trustee by such Reference Treasury Dealer at or
before 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 "5.625% 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 may be subject to a Periodic Offering;
(xi) not applicable;
(xii) not applicable;
(xiii) the Company will pay the principal of the Notes and any
premium and interest payable at redemption, if any, or at
maturity in immediately available funds at the office of
Deutsche Bank Trust Company Americas, Corporate Trust and
Agency Services, 60 Wall Street, MSNYC 602515, New York, New
York 10005;
(xiv) the Notes shall be issuable in denominations of $1,000
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) So long as any of the Notes are outstanding, the Company
will not create or suffer to be created or to exist any
additional mortgage, pledge, security interest, or other lien
(collectively "Liens") on any of its utility properties or
tangible assets now owned or hereafter acquired to secure any
indebtedness for borrowed money ("Secured Debt"), without
providing that the Notes will be similarly secured. This
restriction does not apply to the Company's subsidiaries, nor
will it prevent any of them from creating or permitting to
exist Liens on their property or assets to secure any Secured
Debt. Further, this restriction on Secured Debt does not apply
to the Company's existing first mortgage bonds that have
previously been issued under its Mortgage and Deed of Trust,
dated as of May 1, 1949, between the Company and Deutsche Bank
Trust Company Americas (formerly Bankers Trust Company), as
Trustee or any indenture supplemental thereto; provided that
this restriction will apply to future issuances thereunder
(other than issuances of refunding first mortgage bonds). In
addition, this restriction does not prevent the creation or
existence of:
(a) Liens on property existing at the time of
acquisition or construction of such property (or created
within one year after completion of such acquisition or
construction), whether by purchase, merger, construction or
otherwise, or to secure the payment of all or any part of the
purchase price or construction cost thereof, including the
extension of any Liens to repairs, renewals, replacements,
substitutions, betterments, additions, extensions and
improvements then or thereafter made on the property subject
thereto;
(b) Financing of the Company's accounts receivable
for electric service;
(c) Any extensions, renewals or replacements (or
successive extensions, renewals or replacements), in whole or
in part, of liens permitted by the foregoing clauses; and
(d) The pledge of any bonds or other securities at
any time issued under any of the Secured Debt permitted by the
above clauses.
In addition to the permitted issuances above, Secured Debt not
otherwise so permitted may be issued in an amount that does
not exceed 15% of Net Tangible Assets as defined below.
"Net Tangible Assets" means the total of all assets (including
revaluations thereof as a result of commercial appraisals,
price level restatement or otherwise) appearing on the
Company's balance sheet, net of applicable reserves and
deductions, but excluding goodwill, trade names, trademarks,
patents, unamortized debt discount and all other like
intangible assets (which term shall not be construed to
include such revaluations), less the aggregate of the
Company's current liabilities appearing on such balance sheet.
For purposes of this definition, the Company's balance sheet
does not include assets and liabilities of its subsidiaries.
This restriction also does not apply to or prevent the
creation or existence of leases made, or existing on property
acquired, in the ordinary course of business.
3. You are hereby requested to authenticate $75,000,000
aggregate principal amount of 5.625% Senior Notes, Series D,
due 2032, executed by the Company and delivered to you
concurrently with this Company Order and Officers'
Certificate, in the manner provided by the Indenture.
4. You are hereby requested to hold the Notes as custodian for
DTC in accordance with the Blanket Letter of Representations
dated June 11, 2003, from the Company to DTC.
5. Concurrently with this Company Order and Officers'
Certificate, an Opinion of Counsel under Sections 2.04 and
13.06 of the Indenture is being delivered to you.
6. The undersigned Henry W. Fayne and Thomas G. Berkemeyer,
the President 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.
Very truly yours,
KENTUCKY POWER COMPANY
By: /s/ Henry W. Fayne
President
And: /s/ Thomas G. Berkemeyer
Assistant Secretary
Acknowledged by Trustee:
By: /s/ Susan Johnson
Authorized Signatory