Exhibit 4(l)

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                      AMERICAN ELECTRIC POWER COMPANY, INC.

             ______________________________________________________,
                 as Collateral Agent and Securities Intermediary

                                       and

                        _______________________________,
                           as Purchase Contract Agent

                                   ----------

                                PLEDGE AGREEMENT

                                   ----------

                            Dated as of_____________

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                                TABLE OF CONTENTS

<TABLE>
<S>                      <C>                                                                               <C>
SECTION 1.               Definitions........................................................................1

SECTION 2.               Pledge; Control....................................................................4
         SECTION 2.1     The Pledge.........................................................................4
         SECTION 2.2     Control; Financing Statement.......................................................4
         SECTION 2.3     Termination........................................................................5

SECTION 3.               Distributions on Pledged Collateral................................................5
         SECTION 3.1     Income Distributions...............................................................5
         SECTION 3.2     Principal Payments Following Termination Event.....................................5
         SECTION 3.3     Principal Payments Prior To or On Purchase Contract Settlement Date................5
         SECTION 3.4     Payments to Purchase Contract Agent................................................6
         SECTION 3.5     Assets Not Properly Released.......................................................6

SECTION 4.               Control............................................................................6
         SECTION 4.1     Establishment of Collateral Account................................................6
         SECTION 4.2     Treatment as Financial Assets......................................................6
         SECTION 4.3     Sole Control by Collateral Agent...................................................6
         SECTION 4.4     Securities Intermediary's Location.................................................7
         SECTION 4.5     No Other Claims....................................................................7
         SECTION 4.6     Investment and Release.............................................................7
         SECTION 4.7     Statements and Confirmations.......................................................7
         SECTION 4.8     Tax Allocations....................................................................7
         SECTION 4.9     No Other Agreements................................................................7
         SECTION 4.10    Powers Coupled With An Interest....................................................7

SECTION 5.               Initial Deposit; Establishment of Treasury SPC Units and Reestablishment
                         of SPC Units.......................................................................8
         SECTION 5.1     Initial Deposit of [Preferred Securities] [Notes]..................................8
         SECTION 5.2     Establishment of Treasury SPC Units................................................8
         SECTION 5.3     Reestablishment of SPC Units.......................................................9
         SECTION 5.4     Termination Event.................................................................10
         SECTION 5.5     Cash Settlement...................................................................11
         SECTION 5.6     Early Settlement..................................................................12
         SECTION 5.7     Application of Proceeds Settlement................................................12
         [SECTION 5.8    Tax Event Redemption..............................................................13

SECTION 6.               Voting Rights.....................................................................13

SECTION 7.               Rights and Remedies...............................................................14
         SECTION 7.1     Rights and Remedies of the Collateral Agent.......................................14
         SECTION 7.2     [Substitution of Notes............................................................15
         SECTION 7.3     [Tax Event Redemption.............................................................15
         SECTION 7.4     Substitutions.....................................................................15

SECTION 8.               Representations and Warranties; Covenants.........................................15
         SECTION 8.1     Representations and Warranties....................................................15
         SECTION 8.2     Covenants.........................................................................16

SECTION 9.               The Collateral Agent and the Securities Intermediary..............................16
         SECTION 9.1     Appointment, Powers and Immunities................................................16
         SECTION 9.2     Instructions of the Company.......................................................17
         SECTION 9.3     Reliance by Collateral Agent and Securities Intermediary..........................17
</TABLE>


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<TABLE>
<S>                      <C>                                                                               <C>
         SECTION 9.4     Rights in Other Capacities........................................................17
         SECTION 9.5     Non-Reliance on Collateral Agent and Securities Intermediary......................17
         SECTION 9.6     Compensation and Indemnity........................................................18
         SECTION 9.7     Failure to Act....................................................................18
         SECTION 9.8     Resignation of Collateral Agent and Securities Intermediary.......................19
         SECTION 9.9     Right to Appoint Agent or Advisor.................................................20
         SECTION 9.10    Survival..........................................................................20
         SECTION 9.11    Exculpation.......................................................................20

SECTION 10.              Amendment.........................................................................20
         SECTION 10.1    Amendment Without Consent of Holders..............................................20
         SECTION 10.2    Amendment With Consent of Holders.................................................21
         SECTION 10.3    Execution of Amendments...........................................................21
         SECTION 10.4    Effect of Amendments..............................................................21
         SECTION 10.5    Reference to Amendments...........................................................21

SECTION 11.              Miscellaneous.....................................................................22
         SECTION 11.1    No Waiver.........................................................................22
         SECTION 11.2    Governing Law.....................................................................22
         SECTION 11.3    Notices...........................................................................22
         SECTION 11.4    Successors and Assigns............................................................22
         SECTION 11.5    Counterparts......................................................................22
         SECTION 11.6    Severability......................................................................23
         SECTION 11.7    Expenses, etc.....................................................................23
         SECTION 11.8    Security Interest Absolute........................................................23
         SECTION 11.9    Notice of a Tax Event, Tax Event Redemption and Termination Event.................23
</TABLE>

EXHIBIT A           Instruction from Purchase Contract Agent to Collateral Agent
                    (Establishment of Treasury SPC Units)
EXHIBIT B           Instruction from Collateral Agent to Securities Intermediary
                    (Establishment of Treasury SPC Units)
EXHIBIT C           Instruction from Purchase Contract Agent to Collateral Agent
                    (Reestablishment of SPC Units)
EXHIBIT D           Instruction from Collateral Agent to Securities Intermediary
                    (Reestablishment of SPC Units)
EXHIBIT E           Notice of Cash Settlement from the Securities Intermediary
                    to the Purchase Contract Agent


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                                PLEDGE AGREEMENT

     PLEDGE AGREEMENT, dated as of ___________, among AMERICAN ELECTRIC POWER
COMPANY, INC., a New York corporation (the "Company"), ______________________,
as collateral agent (in such capacity, together with its successors in such
capacity, the "Collateral Agent"), and as a "securities intermediary" within the
meaning of Section 8-102(a)(14) of the UCC (as defined herein) with respect to
the Collateral Account (in such capacity, together with its successors in such
capacity, the "Securities Intermediary"), and ______________________________, a
New York banking corporation, as purchase contract agent and as attorney-in-fact
of the Holders from time to time of the Securities (in such capacity, together
with its successors in such capacity, the "Purchase Contract Agent") under the
Purchase Contract Agreement.

                                    RECITALS

     The Company and the Purchase Contract Agent are parties to the Purchase
Contract Agreement dated as of the date hereof (as modified and supplemented and
in effect from time to time, the "Purchase Contract Agreement"), pursuant to
which there may be issued up to __________________ SPC Units (the "Securities").

     Each SPC Unit, at issuance, consists of a unit comprised of (a) a stock
purchase contract (as modified and supplemented and in effect from time to time,
a "Purchase Contract") under which [(i)] the Holder will purchase from the
Company not later than the Purchase Contract Settlement Date, for an amount in
cash equal to $[25] (the "Stated Amount"), a number of shares of American
Electric Power Company, Inc. Common Stock $.01 per share par value ("Common
Stock") equal to the Settlement Rate (as defined in the Purchase Contract
Agreement), [and (ii) the Company will pay the Holder Purchase Contract
Payments] and (b) [a Preferred Security (a "Preferred Security") of
____________________ (the "Trust"), having a liquidation amount] [a note of
___________________, a wholly-owned subsidiary of the Company, which note shall
be guaranteed as to payment of principal, premium, if any, and interest by the
Company (a "Note"), having a principal amount] equal to the Stated Amount and
maturing on _____________.

     [address overallotment option, if applicable]

     Pursuant to the terms of the Purchase Contract Agreement and the Purchase
Contracts, the Holders of the Securities have irrevocably authorized the
Purchase Contract Agent, as attorney-in-fact of such Holders, among other
things, to execute and deliver this Agreement on behalf of such Holders and to
grant the pledge provided herein of the Collateral Account to secure the
Obligations.

     Accordingly, the Company, the Collateral Agent, the Securities Intermediary
and the Purchase Contract Agent, on its own behalf and as attorney-in-fact of
the Holders from time to time of the Securities, agree as follows:

     SECTION 1. Definitions.

     For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:

     (a) the terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular;

     (b) the words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular Article,
Section, Exhibit or other subdivision;

     (c) the following terms which are defined in the UCC shall have the
meanings set forth therein: "certificated security", "control", "financial
asset", "entitlement order", "securities account" and "securities entitlement";

<PAGE>

     (d) the following terms have the meanings assigned to them in the Purchase
Contract Agreement: "Act," "Bankruptcy Code," "Board Resolution," "Business
Day," "Cash Settlement," "Certificate," "Early Settlement," "Early Settlement
Amount," "Early Settlement Date," "Holders," "Indenture," "Indenture Trustee,"
"Opinion of Counsel," "Outstanding Securities," "SPC Units," "Person," "Purchase
Contract," "Purchase Contract Payments," "Purchase Contract Settlement Date,"
"Purchase Price," "Remarketing Agent," "Remarketing Agreement," "Settlement
Rate," "Termination Event," "Treasury SPC Units," and "Underwriting Agreement";

     (e) the following terms have the meanings assigned to them in the Amended
and Restated Trust Agreement of ____________________, of even date herewith (the
"Trust Agreement"): "Applicable Ownership Interest," "Applicable Principal
Amount," "Failed Remarketing," "Indenture," "Indenture Trustee," "Primary
Treasury Dealer," "Property Trustee," "Quotation Agent," "Redemption Amount,"
"Redemption Price," "Tax Event," "Tax Event Redemption," "Tax Event Redemption
Date," and "Treasury Portfolio;" and

     (f) the following terms have the meanings given to them in this section
1(f):

     "Agreement" means this Pledge Agreement, as the same may be amended,
modified or supplemented from time to time.

     "Cash" means any coin or currency of the United States as at the time shall
be legal tender for payment of public and private debts.

     "Collateral" has the meaning specified in the definition of Collateral
Account.

     "Collateral Account" means the collective reference to:

          (1) Securities Account No. ____ entitled " _____________________,
     maintained at [Collateral Agent] in the name of
     ______________________________, as Purchase Contract Agent on behalf of the
     holders of securities subject to the Security Interest of __________ as
     Collateral Agent under the Pledge Agreement, for the benefit of American
     Electric Power Company, Inc., as pledgee" maintained by the Securities
     Intermediary for the Purchase Contract Agent on behalf of and as
     attorney-in-fact for the Holders;

          (2) all investment property and other financial assets from time to
     time credited to the Collateral Account, including, without limitation, (A)
     [Preferred Securities] and securities entitlements relating thereto which
     are a component of the SPC Units from time to time, (B) the Applicable
     Ownership Interests (as specified in Clause (A) of the definition of such
     term) of the Holders with respect to the Treasury Portfolio which are a
     component of the SPC Units from time to time; (C) the Notes and securities
     entitlements relating thereto which are a component of the SPC Units from
     time to time, (D) any Treasury Securities and securities entitlements
     relating thereto delivered from time to time upon establishment of Treasury
     SPC Units in accordance with Section 5.2 hereof and (E) payments made by
     Holders pursuant to Section 5.5 hereof;

          (3) all Proceeds of any of the foregoing (whether such Proceeds arise
     before or after the commencement of any proceeding under any applicable
     bankruptcy, insolvency or other similar law, by or against the pledgor or
     with respect to the pledgor); and

          (4) all powers and rights now owned or hereafter acquired under or
     with respect to the Collateral Account;

          ((2), (3) and (4) being collectively referred to herein as the
     "Collateral").

     "Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor shall have become such pursuant to the
applicable provisions of the Purchase Contract Agreement, and thereafter
"Company" shall mean such successor.


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     "Obligations" means, with respect to each Holder, the collective reference
to all obligations and liabilities of such Holder under such Holder's Purchase
Contract (including, but not limited to, such Holder's obligation to pay the
aggregate Purchase Price for Common Stock on the Purchase Contract Settlement
Date) and this Agreement or any other document made, delivered or given in
connection herewith or therewith, in each case whether on account of principal,
interest (including, without limitation, interest accruing before and after the
filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to such Holder, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding),
purchase price, fees, indemnities, costs, expenses or otherwise (including,
without limitation, all fees and disbursements of counsel to the Company or the
Collateral Agent or the Securities Intermediary that are required to be paid by
the Holder pursuant to the terms of any of the foregoing agreements).

     "Permitted Investments" means any one of the following which shall mature
not later than the next succeeding Business Day:

          (1) any evidence of indebtedness with an original maturity of 365 days
     or less issued, or directly and fully guaranteed or insured, by the United
     States of America or any agency or instrumentality thereof (provided that
     the full faith and credit of the United States of America is pledged in
     support of the timely payment thereof or such indebtedness constitutes a
     general obligation of it);

          (2) deposits, certificates of deposit or acceptances with an original
     maturity of 365 days or less of any institution which is a member of the
     Federal Reserve System having combined capital and surplus and undivided
     profits of not less than $200.0 million at the time of deposit;

          (3) investments with an original maturity of 365 days or less of any
     Person that is fully and unconditionally guaranteed by a bank referred to
     in clause (2);

          (4) repurchase agreements and reverse repurchase agreements relating
     to marketable direct obligations issued or unconditionally guaranteed by
     the United States Government or issued by any agency thereof and backed as
     to timely payment by the full faith and credit of the United States
     Government;

          (5) investments in commercial paper, other than commercial paper
     issued by the Company or its affiliates, of any corporation incorporated
     under the laws of the United States or any State thereof, which commercial
     paper has a rating at the time of purchase at least equal to "A-1" by
     Standard & Poor's Ratings Services ("S&P") or at least equal to "P-1" by
     Moody's Investors Service, Inc. ("Moody's"); and

          (6) investments in money market funds registered under the Investment
     Company Act of 1940, as amended, rated in the highest applicable rating
     category by S&P or Moody's.

     "Person" means any legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company, trust, unincorporated organization or government or any
agency or political subdivision thereof.

     "Pledge" means the pledge, lien and security interest created by this
Agreement.

     "Pledged Notes" means the Notes and securities entitlements with respect
thereto from time to time credited to the Collateral Account and not then
released from the Pledge.

     "Pledged Preferred Securities" means the Preferred Securities and
securities entitlements with respect thereto from time to time credited to the
Collateral Account and not then released from the Pledge.

     "Pledged Treasury Securities" means Treasury Securities and securities
entitlements with respect thereto from time to time credited to the Collateral
Account and not then released from the Pledge.

     "Proceeds" has the meaning ascribed thereto in the UCC and includes,
without limitation, all interest, dividends, cash, instruments, securities,
financial assets (as defined in Section 8-102(a)(9) of the UCC) and


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<PAGE>

other property received, receivable or otherwise distributed upon the sale,
exchange, collection or disposition of any financial assets from time to time
held in the Collateral Account.

     "Purchase Contract Agent" has the meaning specified in the paragraph
preceding the recitals of this Agreement.

     "TRADES" means the Treasury Reserve Automated Debt Entry System maintained
by the Federal Reserve Bank of New York pursuant to the TRADES Regulations.

     "TRADES Regulations" means the regulations of the United States Department
of the Treasury, published at 31 C.F.R. Part 357, as amended from time to time.
Unless otherwise defined herein, all terms defined in the TRADES Regulations are
used herein as therein defined.

     "Transfer" means:

          (1) in the case of certificated securities in registered form,
     delivery as provided in Section 8-301(a) of the UCC, indorsed to the
     transferee or in blank by an effective indorsement;

          (2) in the case of Treasury Securities, registration of the transferee
     as the owner of such Treasury Securities on TRADES; and

          (3) in the case of securities entitlements, including, without
     limitation, securities entitlements with respect to Treasury Securities, a
     securities intermediary indicating by book entry that such security
     entitlement has been credited to the transferee's securities account.

     "Treasury Securities" means zero-coupon U.S. Treasury Securities (Cusip
No.___________________) which are the principal strips of the _____% U.S.
Treasury Securities which mature on _____________________.

     "UCC" means the Uniform Commercial Code as in effect in the State of New
York from time to time.

     "Value" means, with respect to any item of Collateral on any date, as to
(1) Cash, the face amount thereof, [(2) Preferred Securities, the liquidation
amount thereof] and (3) Treasury Securities or Notes, the aggregate principal
amount thereof at maturity.

     SECTION 2. Pledge; Control.

     SECTION 2.1 The Pledge.

     Each Holder, from time to time acting through the Purchase Contract Agent
as such Holder's attorney-in-fact, hereby pledges and grants to the Collateral
Agent, as agent of and for the benefit of the Company, as collateral security
for the prompt and complete payment and performance when due (whether at stated
maturity, by acceleration or otherwise) of the Obligations, a continuing first
priority security interest in and to, and a lien upon and right of set off
against, all of the right, title and interest of such Holder and the Purchase
Contract Agent in and to the Collateral and the Collateral Account. The
Collateral Agent shall have all of the rights, remedies and recourses with
respect to the Collateral afforded a secured party by the UCC, in addition to,
and not in limitation of, the other rights, remedies and recourses afforded to
the Collateral Agent by this Agreement.

     SECTION 2.2 Control; Financing Statement.

     (a) The Collateral Agent shall have control of the Collateral Account
pursuant to the provisions of Section 4 of this Agreement.


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<PAGE>

     (b) On the date of initial issuance of the Securities, the Purchase
Contract Agent shall deliver to the Collateral Agent a financing statement
prepared by the Company for filing in the Office of the Secretary of State of
the State of New York, signed by the Purchase Contract Agent, as attorney-in-
fact for the Holders, as Debtors, and describing the Collateral.

     SECTION 2.3 Termination.

     As to each Holder, this Agreement and the Pledge created hereby shall
terminate upon the satisfaction of such Holder's Obligations. Upon such
termination, the Securities Intermediary shall Transfer such Holder's portion of
the Collateral to the Purchase Contract Agent for distribution to such Holder in
accordance with his interest, free and clear of any lien, pledge or security
interest created hereby.

     SECTION 3. Distributions on Pledged Collateral.

     SECTION 3.1 Income Distributions.

     All income distributions received by the Securities Intermediary on account
of the [Preferred Securities, the Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) in the Treasury Portfolio,] the Notes
or Permitted Investments from time to time held in the Collateral Account shall
be distributed to the Purchase Contract Agent for the benefit of the applicable
Holders as provided in the Purchase Contracts or the Purchase Contract
Agreement.

     SECTION 3.2 Principal Payments Following Termination Event.

     All payments received by the Securities Intermediary following a
Termination Event of (1) the [liquidation amount of Pledged Preferred Securities
or securities entitlements with respect thereto or (2) the Applicable Ownership
Interests (as specified in Clause (A) of the definition thereof) in the Treasury
Portfolio, (3) the] principal amount of Pledged Notes or securities entitlements
with respect thereto or (4) the principal amount of the Pledged Treasury
Securities or securities entitlements with respect thereto, shall be distributed
to the Purchase Contract Agent for the benefit of the applicable Holders for
distribution to such Holders in accordance with their respective interests.

     SECTION 3.3 Principal Payments Prior To or On Purchase Contract Settlement
                 Date.

     (a) Subject to the provisions of Section 7.2, and except as provided in
clause 3.3(b) below, if no Termination Event shall have occurred, all payments
received by the Securities Intermediary of (1) the [liquidation amount of
Pledged Preferred Securities or securities entitlements with respect thereto or
(2) the Applicable Ownership Interests (as specified in Clause (A) of the
definition thereof) in the Treasury Portfolio, (3)] the principal amount with
respect to the Pledged Notes or securities entitlements with respect thereto or
(4) the principal amount of Pledged Treasury Securities or securities
entitlements with respect thereto, shall be held and invested in Permitted
Investments until the Purchase Contract Settlement Date and on the Purchase
Contract Settlement Date distributed to the Company as provided in Section 5.7
hereof. Any balance remaining in the Collateral Account shall be distributed to
the Purchase Contract Agent for the benefit of the applicable Holders for
distribution to such Holders in accordance with their respective interests.

     (b) All payments received by the Securities Intermediary of (1) the
liquidation amount of Pledged Preferred Securities or securities entitlements
with respect thereto, or (2) the Applicable Ownership Interests (as specified in
Clause (A) of the definition thereof) in the Treasury Portfolio, or (3) the
principal amount of Notes or securities entitlements with respect thereto or (4)
the principal amount of Treasury Securities or securities entitlements with
respect thereto, that, in each case, have been released from the Pledge shall be
distributed to the Purchase Contract Agent for the benefit of the applicable
Holders for distribution to such Holders in accordance with their respective
interests.


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<PAGE>

     SECTION 3.4 Payments to Purchase Contract Agent.

     Payments to the Purchase Contract Agent hereunder shall be made to the
account designated by the Purchase Contract Agent for such purpose not later
than 12:00 p.m. (New York City time) on the Business Day such payment is
received by the Securities Intermediary; provided, however, that if such payment
is received on a day that is not a Business Day or after 12:00 p.m. (New York
City time) on a Business Day, then such payment shall be made no later than
10:30 a.m. (New York City time) on the next succeeding Business Day.

     SECTION 3.5 Assets Not Properly Released.

     If the Purchase Contract Agent or any Holder shall receive any principal
payments on account of financial assets credited to the Collateral Account and
not released therefrom in accordance with this Agreement, the Purchase Contract
Agent or such Holder shall hold the same as trustee of an express trust for the
benefit of the Company and, upon receipt of an Officers' Certificate (as defined
in the Purchase Contract Agreement) of the Company so directing, promptly
deliver the same to the Securities Intermediary for credit to the Collateral
Account or to the Company for application to the obligations of the Holders
under the related Purchase Contracts, and the Purchase Contract Agent and
Holders shall acquire no right, title or interest in any such payments of
principal amounts so received.

     SECTION 4. Control.

     SECTION 4.1 Establishment of Collateral Account.

     The Securities Intermediary hereby confirms that:

          (1) the Securities Intermediary has established the Collateral
     Account;

          (2) the Collateral Account is a securities account;

          (3) subject to the terms of this Agreement, the Securities
     Intermediary shall treat the Purchase Contract Agent as entitled to
     exercise the rights that comprise any financial asset credited to the
     Collateral Account;

          (4) all property delivered to the Securities Intermediary pursuant to
     this Agreement or the Purchase Contract Agreement will be credited promptly
     to the Collateral Account;

          (5) all securities or other property underlying any financial assets
     credited to the Collateral Account shall be registered in the name of the
     Securities Intermediary, indorsed to the Securities Intermediary, or in
     blank or credited to another securities account maintained in the name of
     the Securities Intermediary, and in no case will any financial asset
     credited to the Collateral Account be registered in the name of the
     Purchase Contract Agent or any Holder, payable to the order of the Purchase
     Contract Agent or any Holder or specially indorsed to the Purchase Contract
     Agent or any Holder.

     SECTION 4.2 Treatment as Financial Assets.

     Each item of property (whether investment property, financial asset,
security, instrument or cash) credited to the Collateral Account shall be
treated as a financial asset.

     SECTION 4.3 Sole Control by Collateral Agent.

     Except as provided in Section 6, at all times prior to the termination of
the Pledge, the Collateral Agent shall have sole control of the Collateral
Account, and the Securities Intermediary shall take instructions and directions
with respect to the Collateral Account solely from the Collateral Agent. If at
any time the Securities Intermediary shall receive an entitlement order issued
by the Collateral Agent and relating to the Collateral Account, the Securities
Intermediary shall comply with such entitlement order without further consent by
the Purchase


                                      -6-

<PAGE>

Contract Agent or any Holder or any other Person. Until termination of the
Pledge, the Securities Intermediary will not comply with any entitlement orders
issued by the Purchase Contract Agent or any Holder.

     SECTION 4.4 Securities Intermediary's Location.

     The Collateral Account, and the rights and obligations of the Securities
Intermediary, the Collateral Agent, the Purchase Contract Agent and the Holders
with respect thereto, shall be governed by the laws of the State of New York.
Regardless of any provision in any other agreement, for purposes of the UCC, New
York shall be deemed to be the Securities Intermediary's location.

     SECTION 4.5 No Other Claims.

     Except for the claims and interest of the Collateral Agent and of the
Purchase Contract Agent and the Holders in the Collateral Account, the
Securities Intermediary does not know of any claim to, or interest in, the
Collateral Account or in any financial asset credited thereto. If any person
asserts any lien, encumbrance or adverse claim (including any writ, garnishment,
judgment, warrant of attachment, execution or similar process) against the
Collateral Account or in any financial asset carried therein, the Securities
Intermediary will promptly notify the Collateral Agent and the Purchase Contract
Agent.

     SECTION 4.6 Investment and Release.

     All proceeds of financial assets from time to time deposited in the
Collateral Account shall be invested and reinvested as provided in this
Agreement. At all times prior to termination of the Pledge, no property shall be
released from the Collateral Account except in accordance with this Agreement or
upon written instructions of the Collateral Agent.

     SECTION 4.7 Statements and Confirmations.

     The Securities Intermediary will promptly send copies of all statements,
confirmations and other correspondence concerning the Collateral Account and any
financial assets credited thereto simultaneously to each of the Purchase
Contract Agent and the Collateral Agent at their addresses for notices under
this Agreement.

     SECTION 4.8 Tax Allocations.

     The Purchase Contract Agent shall report all items of income, gain, expense
and loss recognized in the Collateral Account to the Internal Revenue Service
and all state and local taxing authorities under the names and taxpayer
identification numbers of the holders which are the beneficial owners thereof.

     SECTION 4.9 No Other Agreements.

     The Securities Intermediary has not entered into, and prior to the
termination of the Pledge will not enter into, any agreement with any other
Person relating to the Collateral Account or any financial assets credited
thereto, including, without limitation, any agreement to comply with entitlement
orders of any Person other than the Collateral Agent.

     SECTION 4.10 Powers Coupled With An Interest.

     The rights and powers granted in this Section 4 to the Collateral Agent
have been granted in order to perfect its security interests in the Collateral
Account, are powers coupled with an interest and will be affected neither by the
bankruptcy of the Purchase Contract Agent or any Holder nor by the lapse of
time. The obligations of the Securities Intermediary under this Section 4 shall
continue in effect until the termination of the Pledge.


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<PAGE>

     SECTION 5. Initial Deposit; Establishment of Treasury SPC Units and
                Reestablishment of SPC Units.

     SECTION 5.1 Initial Deposit of [Preferred Securities] [Notes].

     Prior to or concurrently with the execution and delivery of this Agreement,
the Purchase Contract Agent, on behalf of the initial Holders of the SPC Units,
shall Transfer to the Securities Intermediary, for credit to the Collateral
Account, the [Preferred Securities] [Notes] or securities entitlements relating
thereto, and the Securities Intermediary shall indicate by book-entry that a
securities entitlement to such [Preferred Securities] [Notes] has been credited
to the Collateral Account.

     SECTION 5.2 Establishment of Treasury SPC Units.

     (a) [So long as no Tax Event Redemption shall have occurred, and the Trust
shall not have been dissolved and liquidated,] at any time prior to or on the
seventh Business Day immediately preceding the Purchase Contract Settlement
Date, a Holder of SPC Units shall have the right to establish or reestablish
Treasury SPC Units by substitution of Treasury Securities or securities
entitlements thereto for the Pledged [Preferred Securities] [Notes] comprising a
part of such Holder's SPC Units in integral multiples of 40 SPC Units by:

          (1) transferring to the Securities Intermediary for credit to the
     Collateral Account Treasury Securities or securities entitlements thereto
     having a Value equal to the [liquidation] [principal] amount of the Pledged
     [Preferred Securities] [Notes] to be released, accompanied by a notice,
     substantially in the form of Exhibit C to the Purchase Contract Agreement,
     whereupon the Purchase Contract Agent shall deliver to the Collateral Agent
     a notice, substantially in the form of Exhibit A hereto, (A) stating that
     such Holder has Transferred Treasury Securities or securities entitlements
     thereto to the Securities Intermediary for credit to the Collateral
     Account, (B) stating the Value of the Treasury Securities or securities
     entitlements thereto Transferred by such Holder and (C) requesting that the
     Collateral Agent release from the Pledge the Pledged [Preferred Securities]
     [Notes] that are a component of such SPC Units; and

          (2) delivering the related SPC Units to the Purchase Contract Agent.

     Upon receipt of such notice and confirmation that Treasury Securities or
securities entitlements thereto have been credited to the Collateral Account as
described in such notice, the Collateral Agent shall instruct the Securities
Intermediary by a notice, substantially in the form of Exhibit B hereto, to
release such Pledged [Preferred Securities] [Notes] from the Pledge by Transfer
to the Purchase Contract Agent for distribution to such Holder, free and clear
of any lien, pledge or security interest created hereby.

     (b) If a Tax Event Redemption has occurred and the Treasury Portfolio has
become a component of the SPC Units, a Holder of SPC Units shall not have the
right to establish or reestablish Treasury SPC Units.

     (c) If no Tax Event Redemption shall have occurred, but the Trust shall
have been dissolved and liquidated, and the Notes have become a component of the
SPC Units, at any time on or prior to the seventh Business Day immediately
preceding the Purchase Contract Settlement Date, a Holder of SPC Units shall
have the right to substitute Treasury Securities or securities entitlements
thereto for the Pledged Notes comprising a part of such Holder's SPC Units in
integral multiples of 40 SPC Units by:

          (1) Transferring to the Securities Intermediary for credit to the
     Collateral Account Treasury Securities or securities entitlements with
     respect thereto having a Value equal to the aggregate principal amount at
     maturity of Pledged Notes to be released, accompanied by a notice,
     substantially in the form of Exhibit C to the Purchase Contract Agreement,
     whereupon the Purchase Contract Agent shall deliver to the Collateral Agent
     a notice, substantially in the form of Exhibit A hereto, (A) stating that
     such Holder has Transferred Treasury Securities or securities entitlements
     with respect thereto to the Securities Intermediary for credit to the
     Collateral Account, (B) stating the Value of the Treasury Securities or
     securities


                                      -8-

<PAGE>

     entitlements with respect thereto Transferred by such Holder and (C)
     requesting that the Collateral Agent release from the Pledge the Pledged
     Notes that are a component of such SPC Units; and

          (2) delivering the related SPC Units to the Purchase Contract Agent.

     Upon receipt of such notice and confirmation that Treasury Securities or
securities entitlements with respect thereto have been credited to the
Collateral Account as described in such notice, the Collateral Agent shall
instruct the Securities Intermediary by a notice, substantially in the form of
Exhibit B hereto, to release such Pledged Notes from the Pledge by Transfer to
the Purchase Contract Agent for distribution to such Holder free and clear of
any lien, pledge or security interest created hereby.

     (d) Upon credit to the Collateral Account of Treasury Securities or
securities entitlements thereto delivered by a Holder of SPC Units and receipt
of the related instruction from the Collateral Agent, the Securities
Intermediary shall release the Pledged [Preferred Securities or] Notes[, as the
case may be,] and shall promptly transfer the same to the Purchase Contract
Agent for distribution to such Holder, free and clear of any lien, pledge or
security interest created hereby.

     SECTION 5.3 Reestablishment of SPC Units.

     (a) [So long as no Tax Event Redemption shall have occurred, and the Trust
shall not have been dissolved and liquidated,] at any time prior to or on the
seventh Business Day immediately preceding the Purchase Contract Settlement
Date, a Holder of Treasury SPC Units shall have the right to reestablish SPC
Units by substitution of [Preferred Securities] [Notes] or securities
entitlements thereto for Pledged Treasury Securities in integral multiples of 40
Treasury SPC Units by:

          (1) Transferring to the Securities Intermediary for credit to the
     Collateral Account [Preferred Securities] [Notes] or securities
     entitlements thereto having a [liquidation] [principal] amount equal to the
     Value of the Pledged Treasury Securities to be released, accompanied by a
     notice, substantially in the form of Exhibit C to the Purchase Contract
     Agreement, whereupon the Purchase Contract Agent shall deliver to the
     Collateral Agent a notice, substantially in the form of Exhibit C hereto,
     (A) stating that such Holder has Transferred [Preferred Securities] [Notes]
     or securities entitlements thereto to the Securities Intermediary for
     credit to the Collateral Account and (B) requesting that the Collateral
     Agent release from the Pledge the Pledged Treasury Securities related to
     such Treasury SPC Units; and

          (2) delivering the related Treasury SPC Units to the Purchase Contract
     Agent.

     Upon receipt of such notice and confirmation that [Preferred Securities]
[Notes] or securities entitlements thereto have been credited to the Collateral
Account as described in such notice, the Collateral Agent shall instruct the
Securities Intermediary by a notice in the form provided in Exhibit D hereto to
release such Pledged Treasury Securities from the Pledge by Transfer to the
Purchase Contract Agent for distribution to such Holder.

     (b) If a Tax Event Redemption has occurred and the Treasury Portfolio has
become a component of the SPC Units, a holder of a Treasury SPC Unit shall not
have the right to reestablish a SPC Unit.]

     (c) If no Tax Event Redemption shall have occurred, but the Trust shall
have been dissolved and liquidated, and the Notes have become a component of the
SPC Units, at any time on or prior to the seventh Business Day immediately
preceding the Purchase Contract Settlement Date, a Holder of Treasury SPC Units
shall have the right to reestablish SPC Units by substitution of Notes or
securities entitlements with respect thereto for Pledged Treasury Securities in
integral multiples of 40 Treasury SPC Units by:

          (1) Transferring to the Securities Intermediary for credit to the
     Collateral Account Notes or securities entitlements having a principal
     amount equal to the Value of the Pledged Treasury Securities to be
     released, accompanied by a notice,


                                      -9-

<PAGE>

     substantially in the form of Exhibit C to the Purchase Contract Agreement,
     whereupon the Purchase Contract Agent shall deliver to the Collateral Agent
     a notice, substantially in the form of Exhibit C hereto, stating that such
     Holder has Transferred the Notes or securities entitlements with respect
     thereto to the Securities Intermediary for credit to the Collateral Account
     and requesting that the Collateral Agent release from the Pledge the
     Pledged Treasury Securities related to such Treasury SPC Units; and

          (2) delivering the related Treasury SPC Units to the Purchase Contract
     Agent.

     Upon receipt of such notice and confirmation that Notes or securities
entitlements have been credited to the Collateral Account as described in such
notice, the Collateral Agent shall instruct the Securities Intermediary by a
notice in the form provided in Exhibit D to release such Pledged Treasury
Securities from Pledge by Transfer to the Purchase Contract Agent for
distribution to such Holder, free and clear of any lien, pledge or security
interest created hereby.

     (d) Upon credit to the Collateral Account of [Preferred Securities or]
Notes[, as the case may be,] or securities entitlements thereto, and receipt of
the related instruction from the Collateral Agent, the Securities Intermediary
shall release the applicable Pledged Treasury Securities and shall promptly
Transfer the same to the Purchase Contract Agent for distribution to such
Holder, free and clear of any lien, pledge or security interest created hereby.

     SECTION 5.4 Termination Event.

     (a) Upon receipt by the Collateral Agent of written notice from the Company
or the Purchase Contract Agent that a Termination Event has occurred, the
Collateral Agent shall release all Collateral from the Pledge and shall promptly
Transfer:

          (1) any Pledged [Preferred Securities] [Notes]or securities
     entitlements with respect thereto [or the Applicable Ownership Interest (as
     specified in clause (A) of the definition of such term) in the Treasury
     Portfolio (if a Tax Event Redemption has occurred and the Treasury
     Portfolio has become a component of the SPC Units) or the Pledged Notes (if
     the Trust has been dissolved and liquidated, and the or securities
     entitlements with respect thereto have become a component of the SPC
     Units)]; and

          (2) any Pledged Treasury Securities, to the Purchase Contract Agent
     for the benefit of the Holders for distribution to such Holders in
     accordance with their respective interests, free and clear of any lien,
     pledge or security interest or other interest created hereby; provided,
     however, if any Holder shall be entitled to receive less than $1,000 with
     respect to his interest in the Applicable Ownership Interest (as specified
     in clause (A) of the definition of such term) in the Treasury Portfolio,
     the Purchase Contract Agent shall have the right to dispose of such
     interest for cash and deliver to such Holder cash in lieu of delivering the
     Applicable Ownership Interest (as specified in clause (A) of the definition
     of such term) in the Treasury Portfolio.

     (b) If such Termination Event shall result from the Company's becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged
[Preferred Securities, the Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) in the Treasury Portfolio, the Pledged]
Notes or the Pledged Treasury Securities, as the case may be, as provided by
this Section 5.4, the Purchase Contract Agent shall:

          (1) use its best efforts to (i) obtain, at the expense of the Company,
     an opinion of a nationally recognized law firm reasonably acceptable to the
     Collateral Agent to the effect that, as a result of the Company's being the
     debtor in such a bankruptcy case, the Collateral Agent will not be
     prohibited from releasing or Transferring the Collateral as provided in
     this Section 5.4, and (ii) deliver such opinion to the Collateral Agent
     within ten days after the occurrence of such Termination Event, and if (A)
     the Purchase Contract Agent shall be unable to obtain such opinion within
     ten days after the occurrence of such Termination Event or (B) the
     Collateral Agent shall continue, after delivery of such opinion, to refuse
     to effectuate the release and Transfer of all Pledged [Preferred
     Securities, the Applicable Ownership Interest (as specified in clause (A)
     of the definition of such term) in the Treasury Portfolio, the Pledged]
     Notes, all


                                      -10-

<PAGE>

     the Pledged Treasury Securities or the Proceeds of any of the foregoing, as
     the case may be, as provided in this Section 5.4, then the Purchase
     Contract Agent shall within fifteen days after the occurrence of such
     Termination Event commence (subject to Section 7.1(b)(3) of the Purchase
     Contract Agreement) an action or proceeding in the court having
     jurisdiction of the Company's case under the Bankruptcy Code seeking an
     order requiring the Collateral Agent to effectuate the release and transfer
     of all Pledged [Preferred Securities, the Applicable Ownership Interest (as
     specified in clause (A) of the definition of such term) in the Treasury
     Portfolio, the Pledged] Notes or all the Pledged Treasury Securities, as
     the case may be, as provided by this Section 5.4; or

          (2) commence (subject to Section 7.1(b)(3) of the Purchase Contract
     Agreement) an action or proceeding like that described in clause
     5.4(b)(1)(B) hereof within ten days after the occurrence of such
     Termination Event.

     SECTION 5.5 Cash Settlement.

     (a) Upon receipt by the Collateral Agent of (1) a notice from the Purchase
Contract Agent promptly after the receipt by the Purchase Contract Agent of a
notice from a Holder of SPC Units or Treasury SPC Units that such Holder has
elected, in accordance with the procedures specified in Section 5.4(a)(i) or
(d)(i) of the Purchase Contract Agreement, respectively, to effect a Cash
Settlement and (2) payment by such Holder by deposit in the Collateral Account
prior to or on 11:00 a.m. (New York City time) on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date [in the case of a
SPC Unit, unless a Tax Event Redemption has occurred, or on the Business Day
prior to the Purchase Contract Settlement Date in the case of Treasury SPC Units
or a SPC Unit, if a Tax Event Redemption has occurred,] of the Purchase Price in
lawful money of the United States by certified or cashier's check or wire
transfer of immediately available funds payable to or upon the order of the
Securities Intermediary, then the Collateral Agent shall:

          (1) instruct the Securities Intermediary promptly to invest any such
     Cash in Permitted Investments [maturing on or prior to the Contract
     Settlement Date];

          (2) release from the Pledge (i) in the case of a Holder of SPC Units,
     the related [Pledged Preferred Securities, Applicable Ownership Interest
     (as specified in clause (A) of the definition of such term) in the Treasury
     Portfolio, or] Pledged Notes [as applicable] or (ii) in the case of a
     Holder of Treasury SPC Units, the related Pledged Treasury Securities with
     a [liquidation] [principal] amount equal to the product of (x) the Stated
     Amount times (y) the number of Purchase Contracts as to which such Holder
     has elected to effect a Cash Settlement pursuant to this Section 5.5(a);
     and

          (3) instruct the Securities Intermediary to Transfer all such Pledged
     [Preferred Securities, Applicable Ownership Interest (as specified in
     clause (A) of the definition of such term) in the Treasury Portfolio, or]
     Pledged Notes or Pledged Treasury Securities, as the case may be, to the
     Purchase Contract Agent for the benefit of such Holder, in each case free
     and clear of the Pledge created hereby, for distribution to such Holder.

     Upon receipt of the proceeds upon the maturity of the Permitted Investments
on the Purchase Contract Settlement Date, the Collateral Agent shall (A)
instruct the Securities Intermediary to pay the portion of such proceeds and
deliver any certified or cashier's checks received, in an aggregate amount equal
to the Purchase Price, to the Company on the Purchase Contract Settlement Date,
and (B) instruct the Securities Intermediary to release any amounts in excess of
the Purchase Price of the interest earned from such Permitted Investments to the
Purchase Contract Agent for distribution to the such Holder.

     (b) [So long as a Tax Event Redemption shall not have occurred,] if a
Holder of SPC Units notifies the Purchase Contract Agent as provided in
paragraph 5.4(a)(i) of the Purchase Contract Agreement of its intention to pay
the Purchase Price in cash, but fails to make such payment as required by
paragraph 5.4(a)(ii) of the Purchase Contract Agreement, such Holder shall be
deemed to have consented to the disposition of such Holder's Pledged [Preferred
Securities or] Notes in accordance with paragraph 5.4(a)(iii) of the Purchase
Contract Agreement.


                                      -11-

<PAGE>

     (c) If a Holder of Treasury SPC Units [or, if a Tax Event Redemption shall
have occurred, a Holder of SPC Units,] notifies the Purchase Contract Agent as
provided in paragraph 5.4(d)(i) of the Purchase Contract Agreement of its
intention to pay the Purchase Price in cash, but fails to make such payment as
required by paragraph 5.4(d)(ii) of the Purchase Contract Agreement, such Holder
shall be deemed to have elected to pay the Purchase Price in accordance with
paragraph 5.4(d)(iii) of the Purchase Contract Agreement.

     (d) Prior to 3:00 p.m. (New York City time) on the fourth Business Day
immediately preceding the Purchase Contract Settlement Date, the Securities
Intermediary shall deliver to the Purchase Contract Agent a notice,
substantially in the form of Exhibit E hereto, stating (i) the amount of cash
that it has received with respect to the Cash Settlement of SPC Units and (ii)
the amount of cash that it has received with respect to the Cash Settlement of
Treasury SPC Units.

     SECTION 5.6 Early Settlement.

     Upon receipt by the Collateral Agent of a notice from the Purchase Contract
Agent that a Holder of Securities has elected to effect Early Settlement of its
obligations under the Purchase Contracts forming a part of such Securities in
accordance with the terms of the Purchase Contracts and Section 5.9 of the
Purchase Contract Agreement (which notice shall set forth the number of such
Purchase Contracts as to which such Holder has elected to effect Early
Settlement), and that the Purchase Contract Agent has received from such Holder,
and paid to the Company as confirmed in writing by the Company, the related
Early Settlement Amounts pursuant to the terms of the Purchase Contracts and the
Purchase Contract Agreement and that all conditions to such Early Settlement
have been satisfied, then the Collateral Agent shall release from the Pledge,
(1) Pledged [Preferred Securities or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definitions at such term) in the
Treasury Portfolio or] Notes in the case of a Holder of SPC Units or (2) Pledged
Treasury Securities, in the case of a Holder of Treasury SPC Units, with a Value
equal to the product of (x) the Stated Amount times (y) the number of Purchase
Contracts as to which such Holder has elected to effect Early Settlement, and
shall instruct the Securities Intermediary to Transfer all such Pledged
[Preferred Securities or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definitions at such term) in the Treasury
Portfolio or] Notes or Pledged Treasury Securities, as the case may be, to the
Purchase Contract Agent for the benefit of such Holder, in each case free and
clear of the Pledge created hereby, for distribution to such Holder. A Treasury
SPC Unit holder may settle early only in integral multiples of 40 Purchase
Contracts.

     SECTION 5.7 Application of Proceeds Settlement.

     (a) So long as a Tax Event Redemption has not occurred, if a Holder of SPC
Units has not elected to make an effective Cash Settlement by notifying the
Purchase Contract Agent in the manner provided for in Section 5.4(a)(i) in the
Purchase Contract Agreement, or has given such notice but failed to deliver the
required cash prior to 11:00 A.M. (New York City time) on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, such Holder shall
be deemed to have elected to pay for the shares of Common Stock to be issued
under such Purchase Contracts from the Proceeds of the remarketing of the
related [Pledged Preferred Securities or] Pledged Notes. In such event, the
Collateral Agent shall instruct the Securities Intermediary to Transfer the
related [Pledged Preferred Securities or] Pledged Notes to the Remarketing Agent
for remarketing. Upon receiving such [Pledged Preferred Securities or] Pledged
Notes, the Remarketing Agent, pursuant to the terms of the Remarketing
Agreement, will use reasonable efforts to remarket such [Pledged Preferred
Securities or] Pledged Notes on such date. The Remarketing Agent will deposit
the entire amount of the Proceeds of such remarketing in the Collateral Account.
On the Purchase Contract Settlement Date, the Collateral Agent shall instruct
the Securities Intermediary to apply a portion of the Proceeds from such
remarketing equal to the aggregate principal amount of such [Pledged Preferred
Securities or] Pledged Notes to satisfy in full such Holder's obligations to pay
the Purchase Price to purchase the shares of Common Stock under the related
Purchase Contracts. The Collateral Agent shall also instruct the Securities
Intermediary to apply a portion of the Proceeds of such remarketing equal to
$[.0625] per [Pledged Preferred Security or] Pledged Note to pay the Remarketing
Agent for its services rendered in connection with the remarketing. The balance
of the Proceeds from such remarketing, if any, shall be transferred to the
Purchase Contract Agent for the benefit of such Holder for distribution to such
Holder.


                                      -12-

<PAGE>

     If the Remarketing Agent advises the Collateral Agent in writing that there
has been a Failed Remarketing, thus resulting in an event of default under the
Purchase Contract Agreement and hereunder, the Collateral Agent, for the benefit
of the Company shall, at the written direction of the Company, dispose of the
[Pledged Preferred Security or] Pledged Notes in accordance with applicable law
and satisfy in full, from such disposition, such Holder's obligations to pay the
Purchase Price for the shares of American Electric Power Company, Inc. Stock.

     (b) If a Holder of Treasury SPC Units [ or, if a Tax Event Redemption has
occurred, a SPC Unit,] has not elected to make an effective Cash Settlement by
notifying the Purchase Contract Agent in the manner provided for in Section
5.4(d)(i) of the Purchase Contract Agreement, or has given such notice but
failed to make such payment in the manner required by Section 5.4(d)(ii) of the
Purchase Contract Agreement, such Holder shall be deemed to have elected to pay
for the shares of Common Stock to be issued under such Purchase Contracts from
the Proceeds of the related Pledged Treasury Securities [(or such Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
in the Treasury Portfolio, as the case may be]. Upon maturity of the Pledged
Treasury Securities [or Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) in the Treasury Portfolio, as the case may
be], the Securities Intermediary, at the written direction of the Collateral
Agent, shall invest the Cash Proceeds of the maturing Pledged Treasury
Securities [or Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) in the Treasury Portfolio, as the case may be,] in
Permitted Investments [maturing on or prior to the Purchase Contract Settlement
Date]. Without receiving any instruction from any such Holder, the Collateral
Agent shall apply the Proceeds of the related Pledged Treasury Securities [or
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) in the Treasury Portfolio, as the case may be], to the settlement of
such Purchase Contracts on the Purchase Contract Settlement Date. In the event
the sum of the Proceeds from the related Pledged Treasury Securities [or
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) in the Treasury Portfolio, as the case may be], and the investment
earnings from the investment in Permitted Investments exceeds the aggregate
Purchase Price of the Purchase Contracts being settled thereby, the Collateral
Agent shall instruct the Securities Intermediary to distribute such excess, when
received, to the Purchase Contract Agent for the benefit of such Holder for
distribution to such Holder.

     [SECTION 5.8 Tax Event Redemption.

     If the Securities Intermediary receives notice from the Company or the
Purchase Contract Agent that a Tax Event Redemption has occurred prior to the
Purchase Contract Settlement Date, the Securities Intermediary, promptly after
receipt of such notice, shall apply the Redemption Amount to purchase the
Treasury Portfolio and the Securities Intermediary shall credit the Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
in the Treasury Portfolio to the Collateral Account and shall transfer the
Applicable Ownership Interest (as specified in clause (B) of the definition of
such term) in the Treasury Portfolio to the Purchase Contract Agent for
distribution to the Holders of the SPC Units. Upon credit to the Collateral
Account of the Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) in the Treasury Portfolio having a Value equal to the
liquidation amount of the Pledged Preferred Securities or the aggregate
principal amount of the Pledged Notes, the Securities Intermediary shall release
the Pledged Preferred Securities or the Pledged Notes, as applicable, from the
Collateral Account and shall promptly transfer the Pledged Preferred Securities
to the Trust and the Pledged Notes to the Company, as applicable.]

     SECTION 6. Voting Rights.

     The Purchase Contract Agent may exercise, or refrain from exercising, any
and all voting and other consensual rights pertaining to the [Pledged Preferred
Securities or] Pledged Notes or any part thereof for any purpose not
inconsistent with the terms of this Agreement and in accordance with the terms
of the Purchase Contract Agreement; provided, that the Purchase Contract Agent
shall not exercise or shall not refrain from exercising such right, as the case
may be, if, in the judgment of the Purchase Contract Agent, such action would
impair or otherwise have a material adverse effect on the value of all or any of
the [Pledged Preferred Securities or] Pledged Notes; and provided, further, that
the Purchase Contract Agent shall give the Company and the Collateral Agent at
least five Business Days' prior written notice of the manner in which it intends
to exercise, or its reasons for refraining from exercising, any such right. Upon
receipt of any notices and other communications in respect of any [Pledged
Preferred Securities or] Pledged Notes, including notice of any meeting at which
holders of the [Preferred Securities


                                      -13-

<PAGE>

or] Notes are entitled to vote or solicitation of consents, waivers or proxies
of holders of the [Preferred Securities or] Notes, the Collateral Agent shall
use reasonable efforts to send promptly to the Purchase Contract Agent such
notice or communication, and as soon as reasonably practicable after receipt of
a written request therefor from the Purchase Contract Agent, execute and deliver
to the Purchase Contract Agent such proxies and other instruments in respect of
such [Pledged Preferred Securities or] Pledged Notes (in form and substance
satisfactory to the Collateral Agent) as are prepared by the Purchase Contract
Agent with respect to the [Pledged Preferred Securities or] Pledged Notes.

     SECTION 7. Rights and Remedies.

     SECTION 7.1 Rights and Remedies of the Collateral Agent.

     (a) In addition to the rights and remedies specified in Sections 5.5 and
5.7 hereof or otherwise available at law or in equity, after an event of default
(as specified in Section 7.1(b) below) hereunder, the Collateral Agent shall
have all of the rights and remedies with respect to the Collateral of a secured
party under the UCC (whether or not the UCC is in effect in the jurisdiction
where the rights and remedies are asserted) and the TRADES Regulations and such
additional rights and remedies to which a secured party is entitled under the
laws in effect in any jurisdiction where any rights and remedies hereunder may
be asserted. Without limiting the generality of the foregoing, such remedies may
include, to the extent permitted by applicable law, (1) retention of the
[Pledged Preferred Securities,] [Pledged Treasury Securities] or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term)] Pledged Notes[, as the case may be,] in full satisfaction of the
Holders' obligations under the Purchase Contracts or (2) sale of the [Pledged
Preferred Securities,] [Pledged Treasury Securities] or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term)] Pledged Notes[, as the case may be] in one or more public or private
sales and application of the proceeds in full satisfaction of the Holders'
obligations under the Purchase Contracts.

     (b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of [the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
in the Treasury Portfolio, or on account of ] principal payments of any Pledged
Treasury Securities as provided in Section 3 hereof, in satisfaction of the
Obligations of the Holder of [the SPC Units (if a Tax Event Redemption has
occurred) of which such appropriate Applicable Ownership Interest (as specified
in clause (A) of the definition of such term) in the Treasury Portfolio or] the
Holder of the Treasury SPC Units of which such Pledged Treasury Securities are a
part under the related Purchase Contracts, the inability to make such payments
shall constitute an event of default hereunder and the Collateral Agent shall
have and may exercise, with reference to such Pledged Treasury Securities or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) in the Treasury Portfolio, as applicable, and such
Obligations of such Holder, any and all of the rights and remedies available to
a secured party under the UCC and the TRADES Regulations after default by a
debtor, and as otherwise granted herein or under any other law.

     (c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the liquidation amount of
the Pledged Preferred Securities, (ii) the principal amount of the Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
in the Treasury Portfolio, (iii) the principal amount of the Pledged Notes and
(iv) the principal amount of the Pledged Treasury Securities subject, in each
case, to the provisions of Section 3 hereof, and as otherwise granted herein.

     (d) The Purchase Contract Agent individually and as attorney-in-fact for
each Holder of Securities, and each Holder of Securities agrees that, from time
to time, upon the written request of the Collateral Agent, or the Purchase
Contract Agent, such Holder shall execute and deliver such further documents and
do such other acts and things as the Collateral Agent may reasonably request in
order to maintain the Pledge, and the perfection and priority thereof, and to
confirm the rights of the Collateral Agent hereunder. The Purchase Contract
Agent shall have no liability to any Holder for executing any documents or
taking any such acts requested by the Collateral Agent hereunder, except for
liability for its own negligent acts, its own negligent failure to act or its
own willful misconduct.


                                      -14-

<PAGE>

     SECTION 7.2 [Substitution of Notes.

     If the Trust shall have been dissolved and liquidated prior to the Purchase
Contract Settlement Date, the Securities Intermediary shall transfer to the
Collateral Agent Notes having a Value equal to the liquidation amount of the
Pledged Preferred Securities for credit to the Collateral Account. Upon credit
to the Collateral Account of such Notes, the Collateral Agent shall release the
Pledged Preferred Securities from the Collateral Account and shall promptly
transfer the same to the Trust.]

     SECTION 7.3 [Tax Event Redemption.

     Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount shall be
credited to the Collateral Account by the Property Trustee or, in case there has
been a dissolution of the Trust and the distribution of the related Notes, by
the Indenture Trustee, on or prior to 12:30 p.m., New York City time on such Tax
Event Redemption Date, by federal funds check or wire transfer of immediately
available funds. The Collateral Agent is hereby authorized to present the
Pledged Preferred Securities or the Pledged Notes for payment as may be required
by their respective terms. Upon receipt of such funds, the Pledged Preferred
Securities or Pledged Notes, as the case may be, shall be released from the
Collateral Account. In the event such funds are credited to the Collateral
Account, the Collateral Agent, at the written direction of the Company, shall
instruct the Securities Intermediary to (a) apply an amount equal to the
Redemption Amount of such Redemption Price to purchase the Treasury Portfolio
from the Quotation Agent for credit to the Collateral Account and (b) promptly
remit the remaining portion of such Redemption Price, if any, to the Purchase
Contract Agent for payment to the Holders of SPC Units.]

     SECTION 7.4 Substitutions.

     Whenever a Holder has the right to substitute Treasury Securities,
[Preferred Securities] Notes [the appropriate Applicable Ownership Interest in
the Treasury Portfolio, as the case may be,] or securities entitlements to any
of them, for financial assets held in the Collateral Account, such substitution
shall not constitute a novation of the security interest created hereby.

     SECTION 8. Representations and Warranties; Covenants.

     SECTION 8.1 Representations and Warranties.

     Each Holder from time to time, acting through the Purchase Contract Agent
as attorney-in-fact (it being understood that the Purchase Contract Agent shall
not be liable for any representation or warranty made by or on behalf of a
Holder), hereby represents and warrants to the Collateral Agent (with respect to
such Holder's interest in the Collateral), which representations and warranties
shall be deemed repeated on each day a Holder Transfers Collateral that:

          (1) such Holder has the power to grant a security interest in and lien
     on the Collateral;

          (2) such Holder is the sole beneficial owner of the Collateral and, in
     the case of Collateral delivered in physical form, is the sole holder of
     such Collateral and is the sole beneficial owner of, or has the right to
     Transfer, the Collateral it Transfers to the Securities Intermediary for
     credit to the Collateral Account, free and clear of any security interest,
     lien, encumbrance, call, liability to pay money or other restriction other
     than the security interest and lien granted under Section 2 hereof;

          (3) upon the Transfer of the Collateral to the Securities Intermediary
     for credit to the Collateral Account, the Collateral Agent, for the benefit
     of the Company, will have a valid and perfected first priority security
     interest therein (assuming that any central clearing operation or any
     securities intermediary or other entity not within the control of the
     Holder involved in the Transfer of the Collateral, including the Collateral
     Agent and the Securities Intermediary, gives the notices and takes the
     action


                                      -15-

<PAGE>

     required of it hereunder and under applicable law for perfection of that
     interest and assuming the establishment and exercise of control pursuant to
     Section 4 hereof); and

          (4) the execution and performance by the Holder of its obligations
     under this Agreement will not result in the creation of any security
     interest, lien or other encumbrance on the Collateral other than the
     security interest and lien granted under Section 2 hereof or violate any
     provision of any existing law or regulation applicable to it or of any
     mortgage, charge, pledge, indenture, contract or undertaking to which it is
     a party or which is binding on it or any of its assets.

     SECTION 8.2 Covenants.

     The Holders from time to time, acting through the Purchase Contract Agent
as their attorney-in-fact (it being understood that the Purchase Contract Agent
shall not be liable for any covenant made by or on behalf of a Holder), hereby
covenant to the Collateral Agent that for so long as the Collateral remains
subject to the Pledge:

          (1) neither the Purchase Contract Agent nor such Holders will create
     or purport to create or allow to subsist any mortgage, charge, lien, pledge
     or any other security interest whatsoever over the Collateral or any part
     of it other than pursuant to this Agreement; and

          (2) neither the Purchase Contract Agent nor such Holders will sell or
     otherwise dispose (or attempt to dispose) of the Collateral or any part of
     it except for the beneficial interest therein, subject to the Pledge
     hereunder, transferred in connection with the Transfer of the Securities.

     SECTION 9. The Collateral Agent and the Securities Intermediary.

     It is hereby agreed as follows:

     SECTION 9.1 Appointment, Powers and Immunities.

     The Collateral Agent shall act as agent for the Company hereunder with such
powers as are specifically vested in the Collateral Agent by the terms of this
Agreement, together with such other powers as are reasonably incidental thereto.
The Collateral Agent shall:

          (1) have no duties or responsibilities except those expressly set
     forth in this Agreement and no implied covenants or obligations shall be
     inferred from this Agreement against the Collateral Agent, nor shall the
     Collateral Agent be bound by the provisions of any agreement by any party
     hereto beyond the specific terms hereof;

          (2) not be responsible for any recitals contained in this Agreement,
     or in any certificate or other document referred to or provided for in, or
     received by it under, this Agreement, the Securities or the Purchase
     Contract Agreement, or for the value, validity, effectiveness, genuineness,
     enforceability or sufficiency of this Agreement (other than as against the
     Collateral Agent), the Securities or the Purchase Contract Agreement or any
     other document referred to or provided for herein or therein or for any
     failure by the Company or any other Person (except the Collateral Agent) to
     perform any of its obligations hereunder or thereunder or for the
     perfection, priority or, except as expressly required hereby, maintenance
     of any security interest created hereunder;

          (3) not be required to initiate or conduct any litigation or
     collection proceedings hereunder (except pursuant to directions furnished
     under Section 9.2 hereof, subject to Section 9.6 hereof);

          (4) not be responsible for any action taken or omitted to be taken by
     it hereunder or under any other document or instrument referred to or
     provided for herein or in connection herewith or therewith, except for its
     own negligence or willful misconduct; and


                                      -16-

<PAGE>

          (5) not be required to advise any party as to selling or retaining, or
     taking or refraining from taking any action with respect to, any securities
     or other property deposited hereunder.

     Subject to the foregoing, during the term of this Agreement, the Collateral
Agent shall take all reasonable action in connection with the safekeeping and
preservation of the Collateral hereunder.

     No provision of this Agreement shall require the Collateral Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder. In no event shall the Collateral
Agent be liable for any amount in excess of the Value of the Collateral.
Notwithstanding the foregoing, each of the Collateral Agent and the Securities
Intermediary in its individual capacity hereby waives any right of setoff,
bankers' lien, liens or perfection rights as securities intermediary or any
counterclaim with respect to any of the Collateral.

     SECTION 9.2 Instructions of the Company.

     The Company shall have the right, by one or more instruments in writing
executed and delivered to the Collateral Agent, to direct the time, method and
place of conducting any proceeding for the realization of any right or remedy
available to the Collateral Agent, or of exercising any power conferred on the
Collateral Agent, or to direct the taking or refraining from taking of any
action authorized by this Agreement; provided, however, that (i) such direction
shall not conflict with the provisions of any law or of this Agreement and (ii)
the Collateral Agent shall be adequately indemnified as provided herein. Nothing
contained in this Section 9.2 shall impair the right of the Collateral Agent in
its discretion to take any action or omit to take any action which it deems
proper and which is not inconsistent with such direction.

     SECTION 9.3 Reliance by Collateral Agent and Securities Intermediary.

     Each of the Securities Intermediary and the Collateral Agent shall be
entitled to rely upon any certification, order, judgment, opinion, notice or
other written communication (including, without limitation, any thereof by
telephone, telecopy, e-mail or similar electronic media, telex or facsimile)
believed by it to be genuine and correct and to have been signed or sent by or
on behalf of the proper Person or Persons (without being required to determine
the correctness of any fact stated therein) and upon advice and statements of
legal counsel and other experts selected by the Collateral Agent and the
Securities Intermediary. As to any matters not expressly provided for by this
Agreement, the Collateral Agent and the Securities Intermediary shall in all
cases be fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions given by the Company in accordance with this
Agreement.

     SECTION 9.4 Rights in Other Capacities.

     The Collateral Agent and the Securities Intermediary and their affiliates
may (without having to account therefor to the Company) accept deposits from,
lend money to, make their investments in and generally engage in any kind of
banking, trust or other business with the Purchase Contract Agent or the
Securities Intermediary, as the case may be, any other Person interested herein
and any Holder of Securities (and any of their respective subsidiaries or
affiliates) as if it were not acting as the Collateral Agent or the Securities
Intermediary, as the case may be, and the Collateral Agent, the Securities
Intermediary and their affiliates may accept fees and other consideration from
the Purchase Contract Agent and any Holder of Securities without having to
account for the same to the Company; provided that each of the Securities
Intermediary and the Collateral Agent covenants and agrees with the Company that
it shall not accept, receive or permit there to be created in favor of itself
and shall take no affirmative action to permit there to be created in favor of
any other Person, any security interest, lien or other encumbrance of any kind
in or upon the Collateral other than the lien created by the Pledge.

     SECTION 9.5 Non-Reliance on Collateral Agent and Securities Intermediary.

     Neither the Securities Intermediary nor the Collateral Agent shall be
required to keep itself informed as to the performance or observance by the
Purchase Contract Agent or any Holder of Securities of this Agreement, the
Purchase Contract Agreement, the Securities or any other document referred to or
provided for


                                      -17-

<PAGE>

herein or therein or to inspect the properties or books of the Purchase Contract
Agent or any Holder of Securities. Neither the Collateral Agent nor the
Securities Intermediary shall have any duty or responsibility to provide the
Company with any credit or other information concerning the affairs, financial
condition or business of the Purchase Contract Agent or any Holder of Securities
(or any of their respective affiliates) that may come into the possession of the
Collateral Agent or the Securities Intermediary or any of their respective
affiliates.

     SECTION 9.6 Compensation and Indemnity.

     The Company agrees to:

          (1) pay the Collateral Agent and the Securities Intermediary from time
     to time such compensation as shall be agreed in writing between the Company
     and the Collateral Agent or the Securities Intermediary, as the case may
     be, for all services rendered by them hereunder; and

          (2) indemnify the Collateral Agent and the Securities Intermediary
     for, and hold each of them harmless from and against, any loss, liability
     or reasonable out-of-pocket expense incurred without negligence, willful
     misconduct or bad faith on its part, arising out of or in connection with
     the acceptance or administration of its powers and duties under this
     Agreement, including the reasonable out-of-pocket costs and expenses
     (including reasonable fees and expenses of counsel) of defending itself
     against any claim or liability in connection with the exercise or
     performance of such powers and duties.

     The Collateral Agent and the Securities Intermediary shall each promptly
notify the Company of any third party claim which may give rise to indemnity
hereunder and give the Company the opportunity to participate in the defense of
such claim with counsel reasonably satisfactory to the indemnified party, and no
such claim shall be settled without the written consent of the Company, which
consent shall not be unreasonably withheld.

     SECTION 9.7 Failure to Act.

     In the event of any ambiguity in the provisions of this Agreement or any
dispute between or conflicting claims by or among the parties hereto or any
other Person with respect to any funds or property deposited hereunder, the
Collateral Agent and the Securities Intermediary shall be entitled, after prompt
notice to the Company and the Purchase Contract Agent, at its sole option, to
refuse to comply with any and all claims, demands or instructions with respect
to such property or funds so long as such dispute or conflict shall continue,
and the Collateral Agent and the Securities Intermediary shall not be or become
liable in any way to any of the parties hereto for its failure or refusal to
comply with such conflicting claims, demands or instructions. The Collateral
Agent and the Securities Intermediary shall be entitled to refuse to act until
either:

          (1) such conflicting or adverse claims or demands shall have been
     finally determined by a court of competent jurisdiction or settled by
     agreement between the conflicting parties as evidenced in a writing
     satisfactory to the Collateral Agent or the Securities Intermediary; or

          (2) the Collateral Agent or the Securities Intermediary shall have
     received security or an indemnity satisfactory to it sufficient to save it
     harmless from and against any and all loss, liability or reasonable out-of-
     pocket expense which it may incur by reason of its acting.

     The Collateral Agent and the Securities Intermediary may in addition elect
to commence an interpleader action or seek other judicial relief or orders as
the Collateral Agent or the Securities Intermediary may deem necessary.
Notwithstanding anything contained herein to the contrary, neither the
Collateral Agent nor the Securities Intermediary shall be required to take any
action that is in its opinion contrary to law or to the terms of this Agreement,
or which would in its opinion subject it or any of its officers, employees or
directors to liability.


                                      -18-

<PAGE>

     SECTION 9.8 Resignation of Collateral Agent and Securities Intermediary.

     (a) Subject to the appointment and acceptance of a successor Collateral
Agent as provided below:

          (1) the Collateral Agent may resign at any time by giving notice
     thereof to the Company and the Purchase Contract Agent as attorney-in-fact
     for the Holders of Securities;

          (2) the Collateral Agent may be removed at any time by the Company;
     and

          (3) if the Collateral Agent fails to perform any of its material
     obligations hereunder in any material respect for a period of not less than
     20 days after receiving written notice of such failure by the Purchase
     Contract Agent and such failure shall be continuing, the Collateral Agent
     may be removed by the Purchase Contract Agent.

     The Purchase Contract Agent shall promptly notify the Company of any
removal of the Collateral Agent pursuant to clause (3) of the immediately
preceding sentence. Upon any such resignation or removal, the Company shall have
the right to appoint a successor Collateral Agent. If no successor Collateral
Agent shall have been so appointed and shall have accepted such appointment
within 30 days after the retiring Collateral Agent's giving of notice of
resignation or such removal, then the retiring Collateral Agent may petition any
court of competent jurisdiction for the appointment of a successor Collateral
Agent. The Collateral Agent shall be a bank which has an office in New York City
with a combined capital and surplus of at least $50,000,000 and shall not be the
Purchase Contract Agent or any of its affiliates. Upon the acceptance of any
appointment as Collateral Agent hereunder by a successor Collateral Agent, such
successor Collateral Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Collateral Agent, and
the retiring Collateral Agent shall take all appropriate action to transfer any
money and property held by it hereunder (including the Collateral) to such
successor Collateral Agent. The retiring Collateral Agent shall, upon such
succession, be discharged from its duties and obligations as Collateral Agent
hereunder. After any retiring Collateral Agent's resignation hereunder as
Collateral Agent, the provisions of this Section 9 shall continue in effect for
its benefit in respect of any actions taken or omitted to be taken by it while
it was acting as the Collateral Agent.

     (b) Subject to the appointment and acceptance of a successor Securities
Intermediary as provided below:

          (1) the Securities Intermediary may resign at any time by giving
     notice thereof to the Company and the Purchase Contract Agent as attorney-
     in-fact for the Holders of Securities;

          (2) the Securities Intermediary may be removed at any time by the
     Company; and

          (3) if the Securities Intermediary fails to perform any of its
     material obligations hereunder in any material respect for a period of not
     less than 20 days after receiving written notice of such failure by the
     Purchase Contract Agent and such failure shall be continuing, the
     Securities Intermediary may be removed by the Purchase Contract Agent.

     The Purchase Contract Agent shall promptly notify the Company of any
removal of the Securities Intermediary pursuant to clause (3) of the immediately
preceding sentence. Upon any such resignation or removal, the Company shall have
the right to appoint a successor Securities Intermediary. If no successor
Securities Intermediary shall have been so appointed and shall have accepted
such appointment within 30 days after the retiring Securities Intermediary's
giving of notice of resignation or such removal, then the retiring Securities
Intermediary may petition any court of competent jurisdiction for the
appointment of a successor Securities Intermediary. The Securities Intermediary
shall be a bank which has an office in New York City with a combined capital and
surplus of at least $50,000,000 and shall not be the Purchase Contract Agent or
any of its affiliates. Upon the acceptance of any appointment as Securities
Intermediary hereunder by a successor Securities Intermediary, such successor
Securities Intermediary shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Securities
Intermediary, and the retiring Securities Intermediary


                                      -19-

<PAGE>

shall take all appropriate action to transfer any money and property held by it
hereunder (including the Collateral) to such successor Securities Intermediary.
The retiring Securities Intermediary shall, upon such succession, be discharged
from its duties and obligations as Securities Intermediary hereunder. After any
retiring Securities Intermediary's resignation hereunder as Securities
Intermediary, the provisions of this Section 9 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as the Securities Intermediary.

     SECTION 9.9 Right to Appoint Agent or Advisor.

     The Collateral Agent shall have the right to appoint agents or advisors in
connection with any of its duties hereunder, and the Collateral Agent shall not
be liable for any action taken or omitted by, or in reliance upon the advice of,
such agents or advisors selected in good faith. The appointment of agents
pursuant to this Section 9.9 shall be subject to prior consent of the Company,
which consent shall not be unreasonably withheld.

     SECTION 9.10 Survival.

     The provisions of this Section 9 shall survive termination of this
Agreement and the resignation or removal of the Collateral Agent or the
Securities Intermediary.

     SECTION 9.11 Exculpation.

     Anything contained in this Agreement to the contrary notwithstanding, in no
event shall the Collateral Agent or the Securities Intermediary or their
officers, directors, employees or agents be liable under this Agreement to any
third party for indirect, special, punitive, or consequential loss or damage of
any kind whatsoever, including lost profits, whether or not the likelihood of
such loss or damage was known to the Collateral Agent or the Securities
Intermediary, or any of them, incurred without any act or deed that is found to
be attributable to gross negligence or willful misconduct on the part of the
Collateral Agent or the Securities Intermediary.

     SECTION 10. Amendment.

     SECTION 10.1 Amendment Without Consent of Holders.

     Without the consent of any Holders, the Company, the Collateral Agent, the
Securities Intermediary and the Purchase Contract Agent, at any time and from
time to time, may amend this Agreement, in form satisfactory to the Company, the
Collateral Agent, the Securities Intermediary and the Purchase Contract Agent,
to:

          (1) evidence the succession of another Person to the Company, and the
     assumption by any such successor of the covenants of the Company;

          (2) evidence and provide for the acceptance of appointment hereunder
     by a successor Collateral Agent, Securities Intermediary or Purchase
     Contract Agent;

          (3) add to the covenants of the Company for the benefit of the
     Holders, or surrender any right or power herein conferred upon the Company,
     provided such covenants or such surrender do not adversely affect the
     validity, perfection or priority of the Pledge created hereunder; or

          (4) cure any ambiguity (or formal defect), correct or supplement any
     provisions herein which may be inconsistent with any other such provisions
     herein, or make any other provisions with respect to such matters or
     questions arising under this Agreement, provided such action shall not
     adversely affect the interests of the Holders.


                                      -20-

<PAGE>

     SECTION 10.2 Amendment With Consent of Holders.

     With the consent of the Holders of not less than a majority of the Purchase
Contracts at the time outstanding, by Act of such Holders delivered to the
Company, the Purchase Contract Agent, the Securities Intermediary and the
Collateral Agent, the Company, the Purchase Contract Agent, the Securities
Intermediary and the Collateral Agent may amend this Agreement for the purpose
of modifying in any manner the provisions of this Agreement or the rights of the
Holders in respect of the Securities; provided, however, that no such
supplemental agreement shall, without the unanimous consent of the Holders of
each Outstanding Security adversely affected thereby:

          (1) change the amount or type of Collateral underlying a Security,
     impair the right of the Holder of any Security to receive distributions on
     the underlying Collateral or otherwise adversely affect the Holder's rights
     in or to such Collateral;

          (2) otherwise effect any action that would require the consent of the
     Holder of each Outstanding Security affected thereby pursuant to the
     Purchase Contract Agreement if such action were effected by an agreement
     supplemental thereto; or

          (3) reduce the percentage of Purchase Contracts the consent of whose
     Holders is required for any such amendment;

     provided that if any amendment or proposal referred to above would
adversely affect only the SPC Units or only the Treasury SPC Units, then only
the affected class of Holders( as of the record date, if any) for the Holders
entitled to vote thereon will be entitled to vote on such amendment or proposal,
and such amendment or proposal shall not be effective except with the consent of
Holders of not less than a majority of such class; provided, further, that the
unanimous consent of the Holders of each outstanding Purchase Contract of such
class affected thereby shall be required to approve any amendment or proposal
specified in clauses (1) through (3) above.

     It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.

     SECTION 10.3 Execution of Amendments.

     In executing any amendment permitted by this Section, the Collateral Agent,
the Securities Intermediary and the Purchase Contract Agent shall be entitled to
receive and (subject to Section 7.1 of the Purchase Contract Agreement with
respect to the Purchase Contract Agent) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent, if
any, to the execution and delivery of such amendment have been satisfied.

     SECTION 10.4 Effect of Amendments.

     Upon the execution of any amendment under this Section, this Agreement
shall be modified in accordance therewith, and such amendment shall form a part
of this Agreement for all purposes; and every Holder of Certificates theretofore
or thereafter authenticated, executed on behalf of the Holders and delivered
under the Purchase Contract Agreement shall be bound thereby.

     SECTION 10.5 Reference to Amendments.

     Certificates authenticated, executed on behalf of the Holders and delivered
after the execution of any amendment pursuant to this Section may, and shall if
required by the Collateral Agent or the Purchase Contract Agent, bear a notation
in form approved by the Purchase Contract Agent and the Collateral Agent as to
any matter provided for in such amendment. If the Company shall so determine,
new Security Certificates so modified as to conform, in the opinion of the
Collateral Agent, the Purchase Contract Agent and the Company, to any such
amendment may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders


                                      -21-

<PAGE>

and delivered by the Purchase Contract Agent in accordance with the Purchase
Contract Agreement in exchange for Outstanding Security Certificates.

     SECTION 11. Miscellaneous.

     SECTION 11.1 No Waiver.

     No failure on the part of the Collateral Agent or any of its agents to
exercise, and no course of dealing with respect to, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise by the Collateral Agent or any of its
agents of any right, power or remedy hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies herein are cumulative and are not exclusive of any remedies provided by
law.

     SECTION 11.2 Governing Law.

     THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.

     The Company, the Collateral Agent, the Securities Intermediary and the
Holders from time to time of the Securities, acting through the Purchase
Contract Agent as their attorney-in-fact, hereby submit to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York state court sitting in New York City for the
purposes of all legal proceedings arising out of or relating to this Agreement
or the transactions contemplated hereby. The Company, the Collateral Agent, the
Securities Intermediary and the Holders from time to time of the Securities,
acting through the Purchase Contract Agent as their attorney-in-fact,
irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.

     SECTION 11.3 Notices.

     All notices, requests, consents and other communications provided for
herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made in writing (including,
without limitation, by telecopy) delivered to the intended recipient at the
"Address for Notices" specified below its name on the signature pages hereof or,
as to any party, at such other address as shall be designated by such party in a
notice to the other parties (or in the case of Holders, as may be made and
deemed given as provided in Section 1.6 of the Purchase Contract Agreement).
Except as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given when transmitted by telecopier or personally
delivered or, in the case of a mailed notice, upon receipt, in each case given
or addressed as aforesaid.

     SECTION 11.4 Successors and Assigns.

     This Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the Company, the Collateral Agent, the
Securities Intermediary and the Purchase Contract Agent, and the Holders from
time to time of the Securities, by their acceptance of the same, shall be deemed
to have agreed to be bound by the provisions hereof and to have ratified the
agreements of, and the grant of the Pledge hereunder by, the Purchase Contract
Agent.

     SECTION 11.5 Counterparts.

     This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument, and any of the
parties hereto may execute this Agreement by signing any such counterpart.


                                      -22-

<PAGE>

     SECTION 11.6 Severability.

     If any provision hereof is invalid and unenforceable in any jurisdiction,
then, to the fullest extent permitted by law, (i) the other provisions hereof
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in order to carry out the intentions of the parties hereto
as nearly as may be possible and (ii) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.

     SECTION 11.7 Expenses, etc.

     The Company agrees to reimburse the Collateral Agent and the Securities
Intermediary for:

          (1) all reasonable out-of-pocket costs and expenses of the Collateral
     Agent and the Securities Intermediary (including, without limitation, the
     reasonable fees and expenses of counsel to the Collateral Agent and the
     Securities Intermediary), in connection with (i) the negotiation,
     preparation, execution and delivery or performance of this Agreement and
     (ii) any modification, supplement or waiver of any of the terms of this
     Agreement;

          (2) all reasonable costs and expenses of the Collateral Agent and the
     Securities Intermediary (including, without limitation, reasonable fees and
     expenses of counsel) in connection with (i) any enforcement or proceedings
     resulting or incurred in connection with causing any Holder of Securities
     to satisfy its obligations under the Purchase Contracts forming a part of
     the Securities and (ii) the enforcement of this Section 11.7; and

          (3) all transfer, stamp, documentary or other similar taxes,
     assessments or charges levied by any governmental or revenue authority in
     respect of this Agreement or any other document referred to herein and all
     costs, expenses, taxes, assessments and other charges incurred in
     connection with any filing, registration, recording or perfection of any
     security interest contemplated hereby.

     SECTION 11.8 Security Interest Absolute.

     All rights of the Collateral Agent and security interests hereunder, and
all obligations of the Holders from time to time hereunder, shall be absolute
and unconditional irrespective of:

          (1) any lack of validity or enforceability of any provision of the
     Purchase Contracts or the Securities or any other agreement or instrument
     relating thereto;

          (2) any change in the time, manner or place of payment of, or any
     other term of, or any increase in the amount of, all or any of the
     obligations of Holders of the Securities under the related Purchase
     Contracts, or any other amendment or waiver of any term of, or any consent
     to any departure from any requirement of, the Purchase Contract Agreement
     or any Purchase Contract or any other agreement or instrument relating
     thereto; or

          (3) any other circumstance which might otherwise constitute a defense
     available to, or discharge of, a borrower, a guarantor or a pledgor.

     SECTION 11.9 Notice of a Tax Event, Tax Event Redemption and Termination
                  Event

     Upon the occurrence of a Tax Event, a Tax Event Redemption or a Termination
Event, the Company shall deliver written notice to the Collateral Agent and the
Securities Intermediary. Upon the written request of the Collateral Agent or the
Securities Intermediary, the Company shall inform such party whether or not a
Tax Event, a Tax Event Redemption or a Termination Event has occurred.


                                      -23-

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

<TABLE>
<S>                                                          <C>
AMERICAN ELECTRIC POWER COMPANY, INC.                        ______________________________, as Purchase Contract
                                                             Agent and as attorney-in- fact of the Holders from time
                                                             to time of the Securities


By:                                                          By:
    ----------------------------------                           ----------------------------------
Name:                                                        Name:
Title:                                                       Title:

Address for Notices:                                         Address for Notices:


Attention:                                                   Attention:
Telecopy:                                                    Telecopy:

___________________________________, as Collateral Agent     ____________________________________, as Securities
                                                             Intermediary


By:                                                          By:
   ---------------------------------                            ----------------------------------
Name:                                                        Name:
Title:                                                       Title:

Address for Notices:                                         Address for Notices:


Attention:                                                   Attention:
Telecopy:                                                    Telecopy:
</TABLE>


                                      -24-

<PAGE>

                                                                       EXHIBIT A

                                   INSTRUCTION
                          FROM PURCHASE CONTRACT AGENT
                               TO COLLATERAL AGENT
                      (Establishment of Treasury SPC Units)


---------------------------

---------------------------

---------------------------

---------------------------
Attention:
           ----------------
Telecopy:
           ----------------

     Re:  SPC Units of American Electric Power Company, Inc. (the "Company") and
          [_________________] [_____________________]

     Please refer to the Pledge Agreement, dated as of ____________________ (the
"Pledge Agreement"), among the Company, you, as Collateral Agent,
__________________, as Securities Intermediary, and the undersigned, as Purchase
Contract Agent and as attorney-in-fact for the holders of SPC Units from time to
time. Capitalized terms used herein but not defined shall have the meaning set
forth in the Pledge Agreement.

     We hereby notify you in accordance with Section 5.2 of the Pledge Agreement
that the holder of securities named below (the "Holder") has elected to
substitute $__________ Value of Treasury Securities or securities entitlements
thereto in exchange for an equal Value of Pledged [Preferred Securities] [Notes]
and has delivered to the undersigned a notice stating that the Holder has
Transferred such Treasury Securities or securities entitlements thereto to the
Securities Intermediary, for credit to the Collateral Account.

     We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Treasury Securities or securities entitlements thereto
have been credited to the Collateral Account, to release to the undersigned an
equal Value of Pledged [Preferred Securities] [Notes] in accordance with Section
5.2 of the Pledge Agreement. [We also hereby confirm that no Tax Event
Redemption has occurred.]

                                     -----------------------------------


                                     By:
                                              --------------------------------
                                              Name:
                                              Title:

Date:

<PAGE>

Please print name and address of Holder electing to substitute Treasury
Securities or securities entitlements thereto for the Pledged [Preferred
Securities] [Notes]:

                               _________________________________________Social
          -----------------    Security  or other Taxpayer Identification
                Name           Number, if any


------------------
Address

------------------

------------------


                                      -2-

<PAGE>

                                                                       EXHIBIT B

                                   INSTRUCTION
                              FROM COLLATERAL AGENT
                           TO SECURITIES INTERMEDIARY
                      (Establishment of Treasury SPC Units)


---------------------------

---------------------------

---------------------------

---------------------------
Attention:
           ----------------
Telecopy:
           ----------------

     Re:  SPC Units of American Electric Power Company, Inc. (the "Company")
          Securities Account No. ____. entitled
          "_________________________________ , as Collateral Agent, Securities
          Account (American Electric Power Company, Inc.)" (the "Collateral
          Account")

     Please refer to the Pledge Agreement, dated as of ________________ (the
"Pledge Agreement"), among the Company, you, as Securities Intermediary,
_______________________, as Purchase Contract Agent and as attorney-in-fact for
the holders of SPC Units from time to time, and the undersigned, as Collateral
Agent. Capitalized terms used herein but not defined shall have the meanings set
forth in the Pledge Agreement.

     When you have confirmed that $__________ Value of Treasury Securities or
securities entitlements thereto has been credited to the Collateral Account by
or for the benefit of _________, as Holder of SPC Units (the "Holder"), you are
hereby instructed to release from the Collateral Account an equal Value of
[Preferred Securities] [Notes] or securities entitlements thereto by Transfer to
the Purchase Contract Agent.

                                     -------------------------------------


                                     By:
                                              ----------------------------
                                              Name:
                                              Title:

Dated:
      ------------------

<PAGE>

Please print name and address of Holder:

                               _________________________________________Social
          -----------------    Security  or other Taxpayer Identification
                Name           Number, if any


------------------
Address

------------------

------------------


                                       -2-

<PAGE>

                                                                       EXHIBIT C

                                   INSTRUCTION
                          FROM PURCHASE CONTRACT AGENT
                               TO COLLATERAL AGENT
                         (Reestablishment of SPC Units )

Attention:
Telecopy:

     Re:  SPC Units of American Electric Power Company, Inc. (the "Company") and
          [______________] [_________________]

     Please refer to the Pledge Agreement, dated as of _______________________
(the "Pledge Agreement"), among the Company, you, as Collateral Agent,
______________________, as Securities Intermediary, and the undersigned, as
Purchase Contract Agent and as attorney-in-fact for the holders of SPC Units
from time to time. Capitalized terms used herein but not defined shall have the
meanings set forth in the Pledge Agreement.

     We hereby notify you in accordance with Section 5.3(a) of the Pledge
Agreement that the holder of securities listed below (the "Holder") has elected
to substitute $__________ Value of [Preferred Securities] [Notes] or securities
entitlements thereto in exchange for $__________ Value of Pledged Treasury
Securities and has delivered to the undersigned a notice stating that the Holder
has Transferred such [Preferred Securities] [Notes] or securities entitlements
thereto to the Securities Intermediary, for credit to the Collateral Account.

     We hereby request that you instruct the Securities Intermediary, upon
confirmation that such [Preferred Securities] [Notes] or securities entitlements
thereto have been credited to the Collateral Account, to release to the
undersigned $__________ Value of Treasury Securities or securities entitlements
thereto related to _______ Treasury SPC Units of such Holder in accordance with
Section 5.3(a) of the Pledge Agreement. [We also hereby confirm that no Tax
Event Redemption has occurred.]

                                     -------------------------------------


                                     By:
                                              ----------------------------
                                              Name:
                                              Title:

Dated:
       ----------------------

<PAGE>

Please print name and address of Holder electing to substitute Pledged
[Preferred Securities] [Notes] or securities entitlements thereto for Pledged
Treasury Securities:

                               _________________________________________Social
          -----------------    Security  or other Taxpayer Identification
                Name           Number, if any


-----------------
Address

-----------------

-----------------


                                       -2-

<PAGE>

                                                                       EXHIBIT D

                                   INSTRUCTION
                              FROM COLLATERAL AGENT
                           TO SECURITIES INTERMEDIARY
                         (Reestablishment of SPC Units)


---------------------------

---------------------------

---------------------------

---------------------------
Attention:
           ----------------
Telecopy:
           ----------------

     Re:  SPC Units of American Electric Power Company, Inc. (the "Company")
          Securities Account No. _____. entitled " ______________________, as
          Collateral Agent, Securities Account (American Electric Power Company,
          Inc.)" (the "Collateral Account")

     Please refer to the Pledge Agreement, dated as of ____________________ (the
"Pledge Agreement"), among the Company, you, as Securities Intermediary,
_____________________, as Purchase Contract Agent and as attorney-in-fact for
the holders of SPC Units from time to time, and the undersigned, as Collateral
Agent. Capitalized terms used herein but not defined shall have the meanings set
forth in the Pledge Agreement.

     When you have confirmed that $_________ Value of [Preferred Securities]
[Notes] or securities entitlements thereto has been credited to the Collateral
Account by or for the benefit of _________, as Holder of SPC Units (the
"Holder"), you are hereby instructed to release from the Collateral Account
$__________ Value of Treasury Securities or securities entitlements thereto by
Transfer to the Purchase Contract Agent.

                                     -------------------------------------


                                     By:
                                              ----------------------------
                                              Name:
                                              Title:

Dated:
       --------------------

<PAGE>

Please print name and address of Holder:

                               _________________________________________Social
          -----------------    Security  or other Taxpayer Identification
                Name           Number, if any


------------------
Address

------------------

------------------


                                      -2-

<PAGE>

                                                                       EXHIBIT E

             NOTICE OF CASH SETTLEMENT FROM SECURITIES INTERMEDIARY
                           TO PURCHASE CONTRACT AGENT
                            (Cash Settlement Amounts)


---------------------------

---------------------------
New York, New York
                   --------
Attention:
           ----------------
Telecopy:
           ----------------

     Re:  SPC Units of American Electric Power Company, Inc. (the "Company") and
          [__________________] [___________________]

     Please refer to the Pledge Agreement, dated as of ___________________ the
"Pledge Agreement"), among you, the Company, ____________________, as Collateral
Agent and the undersigned, as Securities Intermediary. Unless otherwise defined
herein, terms defined in the Pledge Agreement are used herein as defined therein

     In accordance with Section 5.5(d) of the Pledge Agreement, we hereby notify
you that as of 11:00 a.m., [on the fifth Business Day immediately preceding the
Purchase Contract Settlement Date], we have received (i) $_____ in immediately
available funds paid in an aggregate amount equal to the Purchase Price owing to
the Company on the Purchase Contract Settlement Date with respect to __________
SPC Units and (ii) $_________ in immediately available funds paid in an
aggregate amount equal to the Purchase Price owing to the Company on the
Purchase Contract Settlement Date with respect to ______ Treasury SPC Units.

                                     -------------------------------------


                                     By:
                                              ----------------------------
                                              Name:
                                              Title:

Dated:
       --------------------