EXHIBIT 4(b)
TO
DEUTSCHE BANK TRUST COMPANY AMERICAS
AS TRUSTEE
FIRST SUPPLEMENTAL INDENTURE
DATED JULY 11, 2003
$225,000,000
4.85% SENIOR NOTES, SERIES H, DUE 2014
THIS FIRST
SUPPLEMENTAL INDENTURE is made the 11 th day of July,
2003, between OHIO POWER COMPANY, a corporation duly organized and
existing under the laws of the state of Ohio (herein called the
“Company”), having its principal office at 1 Riverside
Plaza, Columbus, Ohio 43215 and Deutsche Bank Trust Company
Americas (formerly Bankers Trust Company), a national banking
association, duly organized and existing under the laws of the
United States, having its principal corporate trust office at 60
Wall Street, New York, New York 10005, as Trustee (herein called
the “Trustee”).
W
I T N E S S E T H:
WHEREAS, the Company
has heretofore entered into an Indenture, dated as of September 1,
1997 (the “Original Indenture”), with the Trustee;
and
WHEREAS, the Original
Indenture is incorporated herein by this reference and the Original
Indenture, as supplemented by this First Supplemental Indenture, is
herein called the “Indenture”; and
WHEREAS, under the
Original Indenture, a new series of unsecured notes (the
“Senior Notes”) may at any time be established by the
Board of Directors of the Company in accordance with the provisions
of the Original Indenture and the terms of such series may be
described by a supplemental indenture executed by the Company and
the Trustee; and
WHEREAS, the Company
proposes to create under the Indenture a series of Senior Notes to
be designated the “4.85% Senior Notes, Series H, due
2014” (the “Series H Notes”), the form and
substance of the Series H Notes and the terms, provisions and
conditions thereof to be set forth as provided in the Original
Indenture and this First Supplemental Indenture; and
WHEREAS, concurrently
with the issuance of the Series H Notes, the Company proposes to
create under the Indenture a series of Senior Notes to be
designated the “6.375% Senior Notes, Series I, due
2033” (the “Series I Notes”), the form and
substance of the Series I Notes and the terms, provisions and
conditions thereof to be set forth as provided in the Original
Indenture and the Second Supplemental Indenture; and
WHEREAS, additional
Senior Notes of other series hereafter established, except as may
be limited in the Original Indenture as at the time supplemented
and modified, may be issued from time to time pursuant to the
Original Indenture as at the time supplemented and modified;
and
WHEREAS, all
conditions necessary to authorize the execution and delivery of
this First Supplemental Indenture and to make it a valid and
binding obligation of the Company have been done or performed;
NOW, THEREFORE, in
consideration of the agreements and obligations set forth herein
and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I
Additional Definitions
SECTION
1.01.
Definitions
The following
defined terms used herein shall, unless the context otherwise
requires, have the meanings specified below. Capitalized terms used
herein for which no definition is provided herein shall have the
meanings set forth in the Original Indenture.
“Company”
means Ohio Power Company, an Ohio corporation and also includes the
Ohio Power Company’s successors and permitted assigns.
“Closing
Date” shall mean July 11, 2003, the initial date of delivery
of the Senior Notes from the Company to the Underwriters.
“Legal
Separation” shall mean the transfer of the Company’s
Transmission and Distribution Business to Ohio Wires.
“Ohio
Wires” shall mean Ohio Wires LLC, a to-be-formed Ohio company
and the affiliate company to which the Company may transfer its
Transmission and Distribution Business.
“Ohio Wires
Exchange Offer” shall mean the offer by Ohio Wires, upon
Legal Separation, to the holders to exchange all of the Senior
Notes held by each such holder for a like amount of Ohio Wires
Notes.
“Ohio Wires
Notes” shall mean notes of Ohio Wires which are identical in
all material respects to the Senior Notes and are registered under
the Securities Act.
“Ohio Wires
Registration” shall mean a registration under the Securities
Act effected pursuant to the section entitled ‘Legal
Separation’ hereof.
“Ohio Wires
Registration Statement” shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another
appropriate form) of Ohio Wires as provided in the section entitled
‘Legal Separation’ hereof and all amendments and
supplements to such registration, in each case including the
Prospectus contained therein, all exhibits thereto and all
documents incorporated by reference therein.
“Transmission
and Distribution Business” means the transmission and
distribution assets of the Company.
ARTICLE II
Series H Notes
SECTION
2.01. Establishment
The Series H Notes
shall be designated as the Company’s “4.85% Senior
Notes, Series H, due 2014”.
SECTION
2.02. Aggregate Principal Amount
The Trustee shall
authenticate and deliver Series H Notes for original issue on the
Original Issue Date in the aggregate principal amount of
$225,000,000 upon a Company Order for authentication and delivery
thereof and satisfaction of Section 2.01 of the Original Indenture.
The aggregate principal amount of the Series H Notes shall be
initially limited to $225,000,000 and shall be subject to Periodic
Offerings pursuant to Article Two of the Original Indenture. All
Series H Notes need not be issued at the same time and such series
may be reopened at any time, without the consent of any Holder, for
issuances of additional Series H Notes. Any such additional Series
H Notes will have the same interest rate, maturity and other terms
as those initially issued. The Series H Notes shall be issued in
definitive fully registered form.
SECTION 2.03.
Maturity and Interest
(i) The Series H
Notes shall mature on, and the date on which the principal of the
Series H Notes shall be payable (unless earlier redeemed) shall be
January 15, 2014;
(ii)
The interest rate at which the Series H Notes shall bear interest
shall be 4.85% per annum; provided, however, that a special
interest premium shall accrue on the Series H Notes under certain
circumstances as provided in clause (iii) below; interest shall
accrue from the date of authentication of the Series H Notes; the
Interest Payment Dates on which such interest will be payable shall
be January 15 and July 15, and the Regular Record Date for the
determination of holders to whom interest is payable on any such
Interest Payment Date shall be the January 1 or July 1 preceding
the relevant Interest Payment Date; provided that the first
Interest Payment Date shall be January 15, 2004 and interest
payable on the Stated Maturity or any redemption date shall be paid
to the Person to whom principal shall be paid; each payment of
interest shall include interest accrued through the day before the
Interest Payment Date;
(iii)
Special interest premium shall accrue on the Series H Notes over
and above the interest rate set forth herein in accordance with
Section 2.08.
SECTION
2.04. Optional Redemption
The Series H Notes
shall be redeemable at the option of the Company, in whole or in
part at any time, upon not less than thirty but not more than sixty
days’ prior notice given by mail to the registered owners of
the Series H Notes at a redemption price equal to the greater of
(i) 100% of the principal amount of the Series H Notes being
redeemed and (ii) the sum of the present values of the remaining
scheduled payments of principal and interest on the Series H 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 20 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 Series H 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
Series H 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 as 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 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.
SECTION
2.05. Limitation on Secured Debt
So long as any of
the Series H 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 utility properties or tangible assets now owned or hereafter
acquired to secure any indebtedness for borrowed money
(“Secured Debt”), without providing that such Series H
Notes will be similarly secured. 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
indenture 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:
(i) 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;
(ii) Financing of the
Company’s accounts receivable for electric service;
(iii) Any
extensions, renewals or replacements (or successive extensions,
renewals or replacements), in whole or in part, of Liens permitted
by the foregoing clauses; and
(iv) 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.
This restriction
also will not apply to or prevent the creation or existence of
leases (operating or capital) made, or existing on property
acquired, in the ordinary course of business.
SECTION
2.06. Global Securities and Certificated
Securities
The Series H Notes
shall be issued in the form of a Global Note in definitive, fully
registered form. The Depositary for the Global Note shall be the
Depository Trust Company. The procedures with respect to transfer
and exchange of Global Notes shall be as set forth in the form of
Note attached hereto.
SECTION
2.07. Form of Securities
The Global Note
shall be substantially in the form attached as Exhibit A
thereto.
SECTION
2.08. Exchange of Senior Notes upon Legal
Separation
If Legal Separation
occurs, Ohio Wires will be obligated to file the Ohio Wires
Registration Statement and to effect the Ohio Wires Exchange Offer,
offering each holder of the Series H Notes the election to (i)
retain its Series H Notes or (ii) exchange its Series H Notes for
Ohio Wires Notes.
If a holder of a
Series H Note fails to elect to retain such note, unless otherwise
required by law, such Holder will be deemed to have exercised his
option to exchange such note for an Ohio Wires Note.
In the case of an
Ohio Wires Exc
