Document:

ex4eproposedorder.htm

    EXHIBIT
      4(e)

     

     

    [Date]

    

    

    Company
      Order and Officers' Certificate

    [Senior
      Notes], Series _, due 20__

    

    

    The
      Bank
      of New York, as Trustee

    ATTN:  Corporate
      Finance Unit

    101
      Barclay Street – 8W

    New
      York,
      New York 10286

    

    Ladies
      and Gentlemen:

    

    Pursuant
      to Article Two of the Indenture, dated as of February 25, 2000 (as it may be
      amended or supplemented, the "Indenture"), from Southwestern Electric Power
      Company (the "Company") to The Bank of New York, as trustee (the "Trustee"),
      and
      the Board Resolutions dated ________ __, ____, a copy of which certified by
      the
      Secretary or an Assistant Secretary of the Company is being delivered herewith
      under Section 2.01 of the Indenture, and unless otherwise provided in a
      subsequent Company Order pursuant to Section 2.04 of the Indenture,

    

    
      	
              1.

            	
              the
                Company's [Senior Notes], Series __ (the "Notes") are hereby
                established.  The Notes shall be in substantially the form
                attached hereto as Exhibit 1.

            
	 	 	 
	
              2.

            	
              the
                terms and characteristics of the Notes shall be as follows (the numbered
                clauses set forth below corresponding to the numbered subsections
                of
                Section 2.01 of the Indenture, with terms used and not defined herein
                having the meanings specified in the Indenture):

            
	 	 	 
	 	
              (i)

            	
              the
                aggregate principal amount of Notes which may be authenticated and
                delivered under the Indenture initially shall be limited to $__________,
                except as contemplated in Section 2.01(i) of the
                Indenture;

            
	 	 	 
	 	
              (ii)

            	
              the
                date on which the principal of the Notes shall be payable shall be
                __________ __, ____;

            
	 	 	 
	 	
              (iii)

            	
              interest
                shall accrue from the date of authentication of the Notes; the Interest
                Payment Dates on which such interest will be payable shall be April
                1 and
                October 1, and the Regular Record Date for the determination of holders
                to
                whom interest is payable on any such Interest Payment Date shall
                be the
                March 15 or September 15 preceding the relevant Interest Payment
                Date;
                provided that the first Interest Payment Date shall be April 1, 2005
                and
                interest payable on the Stated Maturity Date or any Redemption Date
                shall
                be paid to the Person to whom principal shall be paid;

            
	 	 	 
	 	
              (iv)

            	
              the
                interest rate at which the Notes shall bear interest shall be _____%
                per
                annum;

            
	 	 	 
	 	
              (v)

            	
              the
                Notes shall be redeemable at the option of the Company, in whole
                at any
                time or in part from time to time, upon not less than 30 but not
                more than
                60 days' previous notice given by mail to the registered owners of
                the
                Notes at a redemption price equal to the greater of (i) 100% of the
                principal amount of the Notes being redeemed and (ii) the sum of
                the
                present values of the remaining scheduled payments of principal and
                interest on the Notes being redeemed (excluding the portion of any
                such
                interest accrued to the date of redemption) discounted (for purposes
                of
                determining present value) to the redemption date on a semi-annual
                basis
                (assuming a 360-day year consisting of twelve 30-day months) at the
                Treasury Rate (as defined below) plus __ basis points, plus accrued
                interest thereon to the date of redemption.

            
	 	 	 
	 	 	
              "Treasury
                Rate" means, with respect to any redemption date, the rate per annum
                equal
                to the semi-annual equivalent yield to maturity of the Comparable
                Treasury
                Issue, assuming a price for the Comparable Treasury Issue (expressed
                as a
                percentage of its principal amount) equal to the Comparable Treasury
                Price
                for such redemption date.

            
	 	 	 
	 	 	
              "Comparable
                Treasury Issue" means the United States Treasury security selected
                by an
                Independent Investment Banker as having a maturity comparable to
                the
                remaining term of the Notes that would be utilized, at the time of
                selection and in accordance with customary financial practice, in
                pricing
                new issues of corporate debt securities of comparable maturity to
                the
                remaining term of the Notes.

            
	 	 	 
	 	 	
              "Independent
                Investment Banker" means one of the Reference Treasury Dealers appointed
                by the Company and reasonably acceptable to the
                Trustee.

            
	 	 	 
	 	 	
              "Reference
                Treasury Dealer" means a primary U.S. government securities dealer
                in New
                York City selected by the Company and reasonably acceptable to the
                Trustee.

            
	 	 	 
	 	 	
              "Reference
                Treasury Dealer Quotation" means, with respect to the Reference Treasury
                Dealer and any redemption date, the average, as determined by the
                Trustee,
                of the bid and asked prices for the Comparable Treasury Issue (expressed
                in each case as a percentage of its principal amount) quoted in writing
                to
                the Trustee by such Reference Treasury Dealer at or before 5:00 p.m.,
                New
                York City time, on the third Business Day preceding such redemption
                date.

            
	 	 	 
	 	
              (vi)

            	
              (a)
                the Notes shall be issued in the form of a Global Note; (b) the Depositary
                for such Global Note shall be The Depository Trust Company; and (c)
                the
                procedures with respect to transfer and exchange of Global Notes
                shall be
                as set forth in the form of Note attached hereto;

            
	 	 	 
	 	
              (vii)

            	
              the
                title of the Notes shall be "[Senior Notes], Series
                __";

            
	 	 	 
	 	
              (viii)

            	
              the
                form of the Notes shall be as set forth in Paragraph 1,
                above;

            
	 	 	 
	 	
              (ix)

            	
              not
                applicable;

            
	 	 	 
	 	
              (x)

            	
              the
                Notes shall not be subject to a Periodic Offering;

            
	 	 	 
	 	
              (xi)

            	
              not
                applicable;

            
	 	 	 
	 	
              (xii)

            	
              not
                applicable;

            
	 	 	 
	 	
              (xiii)

            	
              not
                applicable;

            
	 	 	 
	 	
              (xiv)

            	
              the
                Notes shall be issuable in denominations of $25 and any integral
                multiple
                thereof;

            
	 	 	 
	 	
              (xv)

            	
              not
                applicable;

            
	 	 	 
	 	
              (xvi)

            	
              the
                Notes shall not be issued as Discount Securities;

            
	 	 	 
	 	
              (xvii)

            	
              not
                applicable;

            
	 	 	 
	 	
              (xviii)

            	
              not
                applicable; and

            
	 	 	 
	 	
              (xix)

            	
              So
                long as any of the Notes are outstanding, the Company will not create
                or
                suffer to be created or to exist any additional mortgage, pledge,
                security
                interest, or other lien (collectively "Liens") on any of its utility
                properties or tangible assets now owned or hereafter acquired to
                secure
                any indebtedness for borrowed money ("Secured Debt"), without providing
                that the Notes will be similarly secured.  This restriction does
                not apply to the Company's subsidiaries, nor will it prevent any
                of them
                from creating or permitting to exist Liens on their property or assets
                to
                secure any Secured Debt.  Further, this restriction on Secured
                Debt does not apply to the Company's existing first mortgage bonds
                that
                have previously been issued under its mortgage indenture or any indenture
                supplemental thereto; provided that this restriction will apply to
                future
                issuances thereunder (other than issuances of refunding first mortgage
                bonds).  In addition, this restriction does not prevent the
                creation or existence of:

            
	 	 	 	 
	 	 	
              (a)

            	
              Liens
                on property existing at the time of acquisition or construction of
                such
                property (or created within one year after completion of such acquisition
                or construction), whether by purchase, merger, construction or otherwise,
                or to secure the payment of all or any part of the purchase price
                or
                construction cost thereof, including the extension of any Liens to
                repairs, renewals, replacements, substitutions, betterments, additions,
                extensions and improvements then or thereafter made on the property
                subject thereto;

            
	 	 	 	 
	 	 	
              (b)

            	
              Financing
                of the Company's accounts receivable for electric
                service;

            
	 	 	 	 
	 	 	
              (c)

            	
              Any
                extensions, renewals or replacements (or successive extensions, renewals
                or replacements), in whole or in part, of liens permitted by the
                foregoing
                clauses; and

            
	 	 	 	 
	 	 	
              (d)

            	
              The
                pledge of any bonds or other securities at any time issued under
                any of
                the Secured Debt permitted by the above clauses.

            
	 	 	 	 
	 	 	
              In
                addition to the permitted issuances above, Secured Debt not otherwise
                so
                permitted may be issued in an amount that does not exceed 15% of
                Net
                Tangible Assets as defined below.

            
	 	 	 
	 	 	
              "Net
                Tangible Assets" means the total of all assets (including revaluations
                thereof as a result of commercial appraisals, price level restatement
                or
                otherwise) appearing on the Company's balance sheet, net of applicable
                reserves and deductions, but excluding goodwill, trade names, trademarks,
                patents, unamortized debt discount and all other like intangible
                assets
                (which term shall not be construed to include such revaluations),
                less the
                aggregate of the Company's current liabilities appearing on such
                balance
                sheet.  For purposes of this definition, the Company's balance
                sheet does not include assets and liabilities of its
                subsidiaries.

            
	 	 	 
	 	 	
              This
                restriction also does not apply to or prevent the creation or existence
                of
                leases made, or existing on property acquired, in the ordinary course
                of
                business.

            
	 	 	 
	
              3.

            	
              You
                are hereby requested to authenticate $_____________ aggregate principal
                amount of _____% [Senior Notes], Series __, due 20__, executed by
                the
                Company and delivered to you concurrently with this Company Order
                and
                Officers' Certificate, in the manner provided by the
                Indenture.

            
	 	 
	
              4.

            	
              You
                are hereby requested to hold the Notes as custodian for DTC in accordance
                with the Blanket Issuer Letter of Representations dated ____________,
                from
                the Company to DTC.

            
	 	 
	
              5.

            	
              Concurrently
                with this Company Order and Officers' Certificate, an Opinion of
                Counsel
                under Sections 2.04 and 13.06 of the Indenture is being delivered
                to
                you.

            
	 	 
	
              6.

            	
              The
                undersigned _________________ and ____________________, the Assistant
                Treasurer and Assistant Secretary, respectively, of the Company do
                hereby
                certify that:

            
	 	 
	 	
              (i)

            	
              we
                have read the relevant portions of the Indenture, including without
                limitation the conditions precedent provided for therein relating
                to the
                action proposed to be taken by the Trustee as requested in this Company
                Order and Officers' Certificate, and the definitions in the Indenture
                relating thereto;

            
	 	 	 
	 	
              (ii)

            	
              we
                have read the Board Resolutions of the Company and the Opinion of
                Counsel
                referred to above;

            
	 	 	 
	 	
              (iii)

            	
              we
                have conferred with other officers of the Company, have examined
                such
                records of the Company and have made such other investigation as
                we deemed
                relevant for purposes of this certificate;

            
	 	 	 
	 	
              (iv)

            	
              in
                our opinion, we have made such examination or investigation as is
                necessary to enable us to express an informed opinion as to whether
                or not
                such conditions have been complied with; and

            
	 	 	 
	 	
              (v)

            	
              on
                the basis of the foregoing, we are of the opinion that all conditions
                precedent provided for in the Indenture relating to the action proposed
                to
                be taken by the Trustee as requested herein have been complied
                with

            

    

    

    Kindly
      acknowledge receipt of this Company Order and Officers' Certificate, including
      the documents listed herein, and confirm the arrangements set forth herein
      by
      signing and returning the copy of this document attached hereto.

    

    Very
      truly yours,

    

    SOUTHWESTERN
      ELECTRIC POWER COMPANY

    

    

    By:___________________________

      Assistant
      Treasurer

    

    

    And:__________________________

      Assistant
      Secretary

    

    

    Acknowledged
      by Trustee:

    

    

    By:___________________________

     Authorized
      Signatory

    
      
        

      

    

    Exhibit
      1

    

    Unless
      this certificate is presented by an authorized representative of The Depository
      Trust Company (55 Water Street, New York, New York) to the issuer or its agent
      for registration of transfer, exchange or payment, and any certificate to be
      issued is registered in the name of Cede & Co. or in such other name as is
      requested by an authorized representative of The Depository Trust Company and
      any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
      FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
      registered owner hereof, Cede & Co., has an interest
      herein.  Except as otherwise provided in Section 2.11 of the
      Indenture, this Security may be transferred, in whole but not in part, only
      to
      another nominee of the Depository or to a successor Depository or to a nominee
      of such successor Depository.

    

    No.   ____

    

    SOUTHWESTERN
      ELECTRIC POWER COMPANY

    [Senior
      Notes], Series __, due 20__

    

    

    
      	
              CUSIP:

            	
              Original
                Issue Date:

            
	 	 
	
              Stated
                Maturity:

            	
              Interest
                Rate:

            
	 	 
	
              Principal
                Amount:

            	 
	 	 
	
              Redeemable:

            	
              Yes

            	 	
              No

            	 
	
              In
                Whole

            	
              Yes

            	 	
              No

            	 
	
              In
                Part

            	
              Yes

            	 	
              No

            	 

    

    

    

    SOUTHWESTERN
      ELECTRIC POWER COMPANY, a
      corporation duly organized and existing under the laws of the State of Delaware
      (herein referred to as the “Company”, which term includes any successor
      corporation under the Indenture hereinafter referred to), for value received,
      hereby promises to pay to CEDE & CO. or registered assigns, the Principal
      Amount specified above on the Stated Maturity specified above, and to pay
      interest on said Principal Amount from the Original Issue Date specified above
      or from the most recent interest payment date (each such date, an “Interest
      Payment Date”) to which interest has been paid or duly provided for,
      semi-annually in arrears on April 1 and October 1 in each year, commencing
      on
      April 1, 2005, at the Interest Rate per annum specified above, until the
      Principal Amount shall have been paid or duly provided for.  Interest
      shall be computed on the basis of a 360-day year of twelve 30-day
      months.

    

    The
      interest so payable, and punctually
      paid or duly provided for, on any Interest Payment Date, as provided in the
      Indenture, as hereinafter defined, shall be paid to the Person in whose name
      this Note (or one or more Predecessor Securities) shall have been registered
      at
      the close of business on the Regular Record Date with respect to such Interest
      Payment Date, which shall be the March 15 or September 15 (whether or not a
      Business Day) prior to such Interest Payment Date, provided that interest
      payable on the Stated Maturity or any redemption date shall be paid to the
      Person to whom principal is paid.  Any such interest not so punctually
      paid or duly provided for shall forthwith cease to be payable to the Holder
      on
      such Regular Record Date and shall be paid as provided in said
      Indenture.

    

    If
      any Interest Payment Date, any
      redemption date or Stated Maturity is not a Business Day, then payment of the
      amounts due on this Note on such date will be made on the next succeeding
      Business Day, and no interest shall accrue on such amounts for the period from
      and after such Interest Payment Date, redemption date or Stated Maturity, as
      the
      case may be, with the same force and effect as if made on such
      date.  The principal of (and premium, if any) and the interest on this
      Note shall be payable at the office or agency of the Company maintained for
      that
      purpose in the Borough of Manhattan, the City of New York, New York, in any
      coin
      or currency of the United States of America which at the time of payment is
      legal tender for payment of public and private debts; provided, however, that
      payment of interest (other than interest payable on the Stated Maturity or
      any
      redemption date) may be made at the option of the Company by check mailed to
      the
      registered holder at such address as shall appear in the Security
      Register.

    

    This
      Note is one of a duly authorized
      series of Notes of the Company (herein sometimes referred to as the “Notes”),
      specified in the Indenture, all issued or to be issued in one or more series
      under and pursuant to an Indenture dated as of February 25, 2000 duly executed
      and delivered between the Company and The Bank of New York, a corporation
      organized and existing under the laws of the State of New York, as Trustee
      (herein referred to as the “Trustee”) (such Indenture, as originally executed
      and delivered and as thereafter supplemented and amended being hereinafter
      referred to as the “Indenture”), to which Indenture and all indentures
      supplemental thereto or Company Orders reference is hereby made for a
      description of the rights, limitations of rights, obligations, duties and
      immunities thereunder of the Trustee, the Company and the holders of the
      Notes.  By the terms of the Indenture, the Notes are issuable in
      series which may vary as to amount, date of maturity, rate of interest and
      in
      other respects as in the Indenture provided.  This Note is one of the
      series of Notes designated on the face hereof.

    

    This
      Note may be redeemed by the
      Company at its option, in whole at any time or in part from time to time, upon
      not less than thirty but not more than sixty days’ previous notice given by mail
      to the registered owners of the Note at a redemption price equal to the greater
      of (i) 100% of the principal amount of the Note being redeemed and (ii) the
      sum
      of the present values of the remaining scheduled payments of principal and
      interest on the Note being redeemed (excluding the portion of any such interest
      accrued to the date of redemption) discounted (for purposes of determining
      present value) to the redemption date on a semi-annual basis (assuming a 360-day
      year consisting of twelve 30-day months) at the Treasury Rate (as defined below)
      plus __ basis points, plus, in each case, accrued interest thereon to the date
      of redemption.

    

    “Treasury
      Rate” means, with respect to any redemption date, the rate per annum equal to
      the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
      assuming a price for the Comparable Treasury Issue (expressed as a percentage
      of
      its principal amount) equal to the Comparable Treasury Price for such redemption
      date.

    

    “Comparable
      Treasury Issue” means the United States Treasury security selected by an
      Independent Investment Banker as having a maturity comparable to the remaining
      term of the Notes that would be utilized, at the time of selection and in
      accordance with customary financial practice, in pricing new issues of corporate
      debt securities of comparable maturity to the remaining term of the
      Notes.

    

    

    “Comparable
      Treasury Price” means, with respect to any redemption date, (1) the average of
      the Reference Treasury Dealer Quotations for such redemption date, after
      excluding the highest and lowest such Reference Treasury Dealer Quotations,
      or
      (2) if fewer than four such Reference Treasury Dealer Quotations are obtained,
      the average of all such quotations.

    

    “Independent
      Investment Banker” means one of the Reference Treasury Dealers appointed by the
      Company and reasonably acceptable to the Trustee.

    

    “Reference
      Treasury Dealer” means a primary U. S. government securities dealer in New York
      City selected by the Company and reasonably acceptable to the
      Trustee.

    

    “Reference
      Treasury Dealer Quotation” means, with respect to the Reference Treasury Dealer
      and any redemption date, the average, as determined by the Trustee, of the
      bid
      and asked prices for the Comparable Treasury Issue (expressed in each case
      as a
      percentage of its principal amount) quoted in writing to the Trustee by such
      Reference Treasury Dealer at or before 5:00 p.m., New York City time, on the
      third Business Day preceding such redemption date.

    

    The
      Company shall not be required to
      (i) issue, exchange or register the transfer of any Notes during a period
      beginning at the opening of business 15 days before the day of the mailing
      of a
      notice of redemption of less than all the outstanding Notes of the same series
      and ending at the close of business on the day of such mailing, nor (ii)
      register the transfer of or exchange of any Notes of any series or portions
      thereof called for redemption.  This Global Note is exchangeable for
      Notes in definitive registered form only under certain limited circumstances
      set
      forth in the Indenture.

    

    In
      the event of redemption of this Note
      in part only, a new Note or Notes of this series, of like tenor, for the
      unredeemed portion hereof will be issued in the name of the Holder hereof upon
      the surrender of this Note.

    

    In
      case an Event of Default, as defined
      in the Indenture, shall have occurred and be continuing, the principal of all
      of
      the Notes may be declared, and upon such declaration shall become, due and
      payable, in the manner, with the effect and subject to the conditions provided
      in the Indenture.

    

    The
      Indenture contains provisions for
      defeasance at any time of the entire indebtedness of this Note upon compliance
      by the Company with certain conditions set forth therein.

    

    As
      described in the Company Order and
      Officers’ Certificate, so long as this Note is outstanding, the Company is
      subject to a limitation on Liens as described therein.

    

    The
      Indenture contains provisions
      permitting the Company and the Trustee, with the consent of the Holders of
      not
      less than a majority in aggregate principal amount of the Notes of each series
      affected at the time outstanding, as defined in the Indenture, to execute
      supplemental indentures for the purpose of adding any provisions to or changing
      in any manner or eliminating any of the provisions of the Indenture or of any
      supplemental indenture or of modifying in any manner the rights of the Holders
      of the Notes; provided, however, that no such supplemental indenture shall
      (i)
      extend the fixed maturity of any Notes of any series, or reduce the principal
      amount thereof, or reduce the rate or extend the time of payment of interest
      thereon, or reduce any premium payable upon the redemption thereof, or reduce
      the amount of the principal of a Discount Security that would be due and payable
      upon a declaration of acceleration of the maturity thereof pursuant to the
      Indenture, without the consent of the holder of each Note then outstanding
      and
      affected; (ii) reduce the aforesaid percentage of Notes, the holders of which
      are required to consent to any such supplemental indenture, or reduce the
      percentage of Notes, the holders of which are required to waive any default
      and
      its consequences, without the consent of the holder of each Note then
      outstanding and affected thereby; or (iii) modify any provision of Section
      6.01(c) of the Indenture (except to increase the percentage of principal amount
      of securities required to rescind and annul any declaration of amounts due
      and
      payable under the Notes), without the consent of the holder of each Note then
      outstanding and affected thereby.  The Indenture also contains
      provisions permitting the Holders of a majority in aggregate principal amount
      of
      the Notes of all series at the time outstanding affected thereby, on behalf
      of
      the Holders of the Notes of such series, to waive any past default in the
      performance of any of the covenants contained in the Indenture, or established
      pursuant to the Indenture with respect to such series, and its consequences,
      except a default in the payment of the principal of or premium, if any, or
      interest on any of the Notes of such series.  Any such consent or
      waiver by the registered Holder of this Note (unless revoked as pro­vided in
      the Indenture) shall be conclusive and binding upon such Holder and upon all
      future Holders and owners of this Note and of any Note issued in exchange
      herefor or in place hereof (whether by registration of transfer or otherwise),
      irrespective of whether or not any notation of such consent or waiver is made
      upon this Note.

    

    No
      reference herein to the Indenture
      and no provision of this Note or of the Indenture shall alter or impair the
      obligation of the Company, which is absolute and unconditional, to pay the
      principal of and premium, if any, and interest on this Note at the time and
      place and at the rate and in the money herein prescribed.

    

    As
      provided in the Indenture and
      subject to certain limitations therein set forth, this Note is transferable
      by
      the registered holder hereof on the Note Register of the Company, upon surrender
      of this Note for registration of transfer at the office or agency of the Company
      as may be designated by the Company accompanied by a written instrument or
      instruments of transfer in form satisfactory to the Company or the Trustee
      duly
      executed by the registered Holder hereof or his or her attorney duly authorized
      in writing, and thereupon one or more new Notes of authorized denominations
      and
      for the same aggregate principal amount and series will be issued to the
      designated transferee or transferees.  No service charge will be made
      for any such trans­fer, but the Company may require payment of a sum
      sufficient to cover any tax or other governmental charge payable in relation
      thereto.

    

    Prior
      to due presentment for
      registration of transfer of this Note, the Company, the Trustee, any paying
      agent and any Note Registrar may deem and treat the registered Holder hereof
      as
      the absolute owner hereof (whether or not this Note shall be overdue and
      notwithstanding any notice of ownership or writing hereon made by anyone other
      than the Note Registrar) for the purpose of receiving payment of or on account
      of the principal hereof and premium, if any, and interest due hereon and for
      all
      other purposes, and neither the Company nor the Trustee nor any paying agent
      nor
      any Note Registrar shall be affected by any notice to the contrary.

    

    No
      recourse shall be had for the
      payment of the principal of or the interest on this Note, or for any claim
      based
      hereon, or otherwise in respect hereof, or based on or in respect of the
      Indenture, against any incorporator, stockholder, officer or director, past,
      present or future, as such, of the Company or of any predecessor or successor
      corporation, whether by virtue of any constitution, statute or rule of law,
      or
      by the enforcement of any assessment or penalty or otherwise, all such liability
      being, by the acceptance hereof and as part of the consideration for the
      issuance hereof, expressly waived and released.

    

    The
      Notes of this series are issuable
      only in registered form without coupons in denominations of $25 and any integral
      multiple thereof.  As provided in the Indenture and subject to certain
      limitations, Notes of this series are exchangeable for a like aggregate
      principal amount of Notes of this series of a different authorized denomination,
      as requested by the Holder surrendering the same.

    

    All
      terms used in this Note which are
      defined in the Indenture shall have the meanings assigned to them in the
      Indenture.

    

    This
      Note shall not be entitled to any
      benefit under the Indenture hereinafter referred to, be valid or become
      obligatory for any purpose until the Certificate of Authentication hereon shall
      have been signed by or on behalf of the Trustee.

    

    IN
      WITNESS WHEREOF, the Company has
      caused this Instrument to be executed.

    

    
      	 	
              SOUTHWESTERN
                ELECTRIC POWER COMPANY

            
	 	 	 
	 	
              By:

            	 
	 	 	
              Assistant
                Treasurer

            
	
              Attest:

            	 	 
	 	 	 
	
              By:

            	 	 
	
              Assistant
                Secretary

            	 	 

    

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    CERTIFICATE
      OF AUTHENTICATION

    

    This
      is one of the Notes of the series
      of Notes designated in accordance with, and referred to in, the within-mentioned
      Indenture.

    

    Dated:               _______________________

    

    THE
      BANK
      OF NEW YORK

    

    

    By:___________________________

       Authorized
      Signatory

    

    

    FOR
      VALUE RECEIVED, the undersigned
      hereby sell(s), assign(s) and transfer(s) unto

    

    (PLEASE
      INSERT SOCIAL SECURITY OR OTHER

       IDENTIFYING
      NUMBER OF ASSIGNEE)

    

    _______________________________________

    

    ________________________________________________________________

    

    ________________________________________________________________

    (PLEASE
      PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF

    ________________________________________________________________

    ASSIGNEE)
      the within Note and all rights thereunder, hereby

    ________________________________________________________________

    irrevocably
      constituting and appointing such person attorney to

    ________________________________________________________________

    transfer
      such Note on the books of the Issuer, with full

    ________________________________________________________________

    power
      of
      substitution in the premises.

    

    

    

    Dated:________________________                                                                                     _________________________

    

    

    

    
      	
              NOTICE:

            	
              The
                signature to this assignment must correspond with the name as written
                upon
                the face of the within Note in every particular, without alteration
                or
                enlargement or any change whatever and NOTICE:  Signature(s)
                must be guaranteed by a financial institution that is a member of
                the
                Securities Transfer Agents Medallion Program (“STAMP”), the Stock Exchange
                Medallion Program (“SEMP”) or the New York Stock Exchange, Inc. Medallion
                Signature Program (“MSP”).ex4fsupplindenture.htm

    Exhibit
      4(f)

    

    SOUTHWESTERN
      ELECTRIC POWER COMPANY

    ISSUER

    

    TO

    

    

    THE
      BANK
      OF NEW YORK,

    TRUSTEE

    

    

    ---------

    

    

    SUPPLEMENTAL
      INDENTURE NO. 1

    

    DATED
      AS
      OF _____________________

    

    

    SUPPLEMENTAL
      TO THE SUBORDINATED INDENTURE

    DATED
      AS
      OF ______________________

    

    

    

    

    ESTABLISHING
      A SERIES OF SECURITIES DESIGNATED

    __%
      SUBORDINATED DEBENTURES, SERIES ___

    LIMITED
      IN AGGREGATE PRINCIPAL AMOUNT TO $___________

    

    

    

                  SUPPLEMENTAL  INDENTURE  NO.  1,  dated
      as of  ___________________

    between  SOUTHWESTERN  ELECTRIC
      POWER COMPANY,  a corporation duly organized and

    existing
      under the laws of the State of Delaware  (herein called the
      "Company"),

    and
      THE
      BANK OF NEW YORK, a New
      York  banking  corporation,  as
      Trustee  (herein

    called  the   "Trustee"),   under  the   Subordinated   Indenture  dated  as  of

    ______________
      (hereinafter called the "Original Indenture"),  this
      Supplemental

    Indenture
      No. 1 being supplemental  thereto.  The Original Indenture
      and any and

    all
      indentures and instruments  supplemental  thereto are
      hereinafter  sometimes

    collectively
      called the "Indenture."

    

                                 RECITALS
      OF THE COMPANY

    

                  The
      Original  Indenture was authorized,  executed and delivered
      by

    the
      Company to provide for the  issuance by the Company from time to time
      of its

    Securities  (such  term
      and all
      other  capitalized  terms  used  herein  without

    definition
      having the meanings assigned to them in the
      Original  Indenture),  to

    be
      issued
      in one or more series as contemplated  therein,  of the
      payment of the

    principal,
      premium, if any, and interest, if any, on such Securities.

    

                  As  contemplated  by  Sections  301
      and  1201(f)  of the  Original

    Indenture,  the  Company  wishes  to  establish  a
      series  of  Securities  to be

    designated
      "__% Subordinated Debentures,  Series ___" to be limited in
      aggregate

    principal  amount  (except
      as  contemplated  in Section  301(b) of
      the  Original

    Indenture)  to  $___________,  such  series  of  Securities  to  be  hereinafter

    sometimes
      called "Series No. 1."

    

                  [The  Company  wishes  to
      issue
      the  Securities  to  _______  (the

    "Trust")
      to  evidence  loans made to the  Company of
      the  proceeds of  Preferred

    Securities
      and common beneficial  ownership interests in the assets of the
      Trust

    to
      be
      issued to the Company ("Common Securities").]

    

                  The
      Company has duly authorized the execution and delivery of this

    Supplemental
      Indenture No. 1 to establish the Securities of Series No. 1 and has

    duly
      authorized the issuance of such Securities;  and all acts necessary to
      make

    this  Supplemental  Indenture
      No. 1 a valid agreement of the Company to make the

    Securities  of  Series  No.  1  valid  obligations  of
      the  Company,  have  been

    performed.

    

                  NOW,
      THEREFORE, THIS SUPPLEMENTAL INDENTURE NO. 1 WITNESSETH:

    

                  For
      and in  consideration  of the  premises and of the
      purchase of

    the
      Securities by the Holders thereof, it is mutually covenanted and agreed,
      for

    the
      equal
      and  proportionate  benefit of all Holders of the Securities
      of Series

    No.
      1, as
      follows:

    

                                       ARTICLE
      ONE

    

                               FIRST
      SERIES OF SECURITIES

    

                  SECTION  1.  There  is  hereby  created  a  series  of  Securities

    designated
      "__% Subordinated  Debentures,  Series ____" and limited in
      aggregate

    principal  amount  (except
      as  contemplated  in Section  301(b) of
      the  Original

    Indenture)
      to $___________. The forms and terms
      of
      the  Securities  of Series No. 1 

    shall
      be  established  in an Officer's Certificate  of
      the  Company,  as  contemplated  by

    Section
      301 of the  Original Indenture.

    

                  SECTION
      2. The Company  hereby  agrees that,  if the
      Company shall

    make
      any  deposit  of
      money  and/or  Eligible  Obligations  with  respect
      to any

    Securities
      of Series No. 1, or any portion of the principal  amount
      thereof,  as

    contemplated  by
      Section 701 of the Indenture,  the Company shall not deliver
      an

    Officer's  Certificate  described  in
      clause (z) in the first  paragraph of said

    Section
      701 unless the Company shall also deliver to the Trustee,  together
      with

    such
      Officer's Certificate, either:

    

                  (A)    an  instrument  wherein
      the  Company,  notwithstanding  the

           satisfaction  and  discharge  of
      its  indebtedness  in  respect  of  such

           Securities,  shall  assume
      the  obligation  (which  shall be absolute
      and

           unconditional)  to  irrevocably  deposit
      with the Trustee or Paying Agent

           such
      additional sums of money, if any, or additional Eligible
      Obligations

           (meeting
      the  requirements  of Section 701),  if any, or
      any  combination

           thereof,
      at such time or times, as shall be necessary,  together with
      the

           money
      and/or Eligible Obligations  theretofore so deposited,  to
      pay when

           due
      the principal of and premium,  if any, and interest due and to
      become

           due
      on such  Securities or portions  thereof,  all in
      accordance with and

           subject
      to the provisions of said Section
      701;  provided,  however,  that

           such  instrument  may
      state that the  obligation  of the  Company to
      make

           additional  deposits
      as aforesaid shall be subject to the delivery to the

           Company
      by the Trustee of a notice  asserting the
      deficiency  accompanied

           by  an  opinion  of  an  independent   public  accountant  of  nationally

           recognized  standing,  selected
      by the Trustee,  showing the  calculation

           thereof  (which
      opinion shall be obtained at the expense of the Company);

           or

    

                  (B)    an
      Opinion of  Counsel  to the effect  that
      the  Holders of

           such
      Securities,  or portions of the principal  amount
      thereof,  will not

           recognize  income,  gain
      or loss
      for  United  States  federal  income
      tax

           purposes
      as a result of the  satisfaction  and discharge of the
      Company's

           indebtedness  in
      respect  thereof  and will be  subject to
      United  States

           federal
      income tax on the same amounts, at the same times and in the same

           manner
      as if such satisfaction and discharge had not been effected.

    

                         [Additional
      provisions relating to Trust, if Securities are

    issued
      in
      connection with Preferred Securities]

    

    

                         [Additional
      provisions relating to Remarketing and interest

    rate
      reset if Securities are issued in connection with Stock Purchase
      Units]

    

                                       ARTICLE
      TWO

    

                                    FORM
      OF SECURITY

    

    

           [IF
      THE SERIES __  DEBENTURE IS TO BE A
      GLOBAL  DEBENTURE,  INSERT - This

    Debenture
      is a Global Debenture within the meaning of the
      Indenture  hereinafter

    referred  to
      and is  registered  in the name of
      a  Depository  or a nominee of a

    Depository.
      This Debenture is exchangeable  for  Debentures  registered
      in the name of a person other than the

    Depository  or
      its nominee  only in the
      limited  circumstances  described in the

    Indenture,  and
      no  transfer  of this  Debenture  (other
      than a transfer of this

    Debenture
      as a whole by the  Depository  to a nominee of
      the  Depository or by a

    nominee  of  the  Depository  to  the  Depository  or  another  nominee  of  the

    Depository)
      may be registered except in limited circumstances.

    

           Unless
      this Debenture is presented by an authorized representative of The

    Depository
      Trust Company, a New York corporation  ("DTC"),  to the
      issuer or its

    agent
      for  registration  of  transfer,  exchange
      or payment,  and any  Debenture

    issued  is  registered  in
      the name of Cede & Co.  or in
      such  other  name as is

    requested
      by an authorized  representative of DTC and any payment hereon is
      made

    to  Cede
      & Co.,  or
      to  such  other  entity  as
      is  requested  by an  authorized

    representative  of
      DTC,  ANY  TRANSFER,  PLEDGE OR OTHER USE HEREOF
      FOR VALUE OR

    OTHERWISE  BY
      OR TO ANY PERSON IS  WRONGFUL  inasmuch  as
      the  registered  owner

    hereof,
      Cede & Co., has an interest herein.]

    

    No.
      ____________                                                    $___________

    

    CUSIP
      No.
      ____________

    

    

                           SOUTHWESTERN
      ELECTRIC POWER COMPANY

    

                                 __%
      JUNIOR SUBORDINATED

                             DEFERRABLE
      INTEREST DEBENTURE,

                                   SERIES__,
      DUE ____

    

           SOUTHWESTERN  ELECTRIC  POWER
      COMPANY,  a corporation  duly organized and

    existing  under
      the laws of the  State of New
      York  (herein  referred  to as the

    "Company",  which
      term  includes any successor  corporation  under
      the Indenture

    hereinafter  referred  to),  for  value  received,  hereby  promises  to  pay
      to

    ______________  or  registered  assigns,  the  principal  sum
      of  ______________

    Dollars
      on  __________,  ____,  and to pay interest on
      said  principal  sum from

    __________,  ____
      or from the most recent interest payment date (each such date,

    an
      "Interest  Payment  Date") to which  interest has
      been paid or duly  provided

    for,  quarterly  (subject
      to  deferral  as set forth  herein) in arrears on
      each

    March
      31,
      June 30, September 30 and December 31
      commencing  __________,  ____ at

    the
      rate
      of __% per annum until the  principal  hereof shall have
      become due and

    payable,  and
      on
      any  overdue  principal  and  premium,  if  any,  and  (without

    duplication
      and to the extent that payment of such interest is enforceable
      under

    applicable  law)
      on
      any  overdue  installment  of  interest
      at the same rate per

    annum
      during such overdue  period.  Interest shall be computed on
      the basis of a

    360-day  year
      of  twelve  30-day  months.  In
      the  event  that any date on which

    interest
      is payable on this  Debenture  is not a
      business  day,  then payment of

    interest
      payable on such date will be made on the next succeeding day which is
      a

    business
      day (and  without any interest or other  payment in respect
      of any such

    delay),  except
      that,  if such business day is in the
      next  succeeding  calendar

    year,
      such payment shall be made on the
      immediately  preceding  business day, in

    each
      case
      with the same force and effect as if made on such
      date.  The  interest

    installment  so  payable,  and  punctually  paid
      or duly  provided  for,  on any

    Interest  Payment
      Date (other than  interest  payable on redemption or
      maturity)

    will,
      as
      provided in the Indenture, be paid to the person in whose
      name this Debenture 

    (or
      one
      or more Predecessor Debentures,  as defined in said  Indenture)
      is  registered  

    at
      the
      close of business on the regular  record date
      for
      such interest installment, [which shall be the close of business on
      the

    business
      day next  preceding  such
      Interest  Payment  Date.] [IF PURSUANT TO THE

    PROVISIONS
      OF SECTION  2.11(C) OF THE INDENTURE THE SERIES __
      DEBENTURES  ARE NO

    LONGER  REPRESENTED
      BY A GLOBAL DEBENTURE - which shall be the close of business

    on
      the
      March 15, June 15, September 15 or December 15 (whether or not a
      business

    day)
      next
      preceding such Interest  Payment Date.] Interest payable on
      redemption

    or
      maturity  shall be payable to the person to whom
      the  principal is paid.  Any

    such  interest  installment  not  punctually  paid
      or duly  provided  for  shall

    forthwith  cease
      to be payable to the registered  holders on such regular
      record

    date,
      and
      may be paid to the person in whose name this Debenture (or one or
      more

    Predecessor  Debentures)  is  registered  at
      the close of  business on a special

    record  date
      to be  fixed  by the  Trustee  for
      the  payment  of such  defaulted

    interest,
      notice whereof shall be given to the registered holders of this
      series

    of
      Debentures not less than 10 days prior to such special record date, or may
      be

    paid  at
      any  time  in  any  other  lawful  manner  not  inconsistent  with  the

    requirements  of
      any securities  exchange on which the Debentures may be
      listed,

    and
      upon
      such  notice as may be  required  by
      such  exchange,  all as more fully

    provided  in
      the  Indenture.  The  principal  of
      (and  premium,  if any) and the

    interest  on
      this  Debenture  shall be  payable  at
      the  office or agency of the

    Company  maintained  for
      that  purpose,  in any coin
      or  currency  of the United

    States
      of
      America  which at the time of payment is legal  tender
      for  payment of

    public
      and
      private  debts;  PROVIDED,  HOWEVER,  that
      payment of interest may be

    made
      at
      the option of the Company by check  mailed to
      the  registered  holder at

    such
      address as shall appear in the Debenture Register.

    

           Payment
      of the  principal  of,  premium,  if
      any,  and  interest  on this

    Debenture
      is, to the extent provided in the Indenture,  subordinated and
      subject

    in
      right
      of payment to the prior payment in full of all Senior
      Indebtedness,  as

    defined
      in the Indenture, and this Debenture is issued subject to the
      provisions

    of
      the  Indenture  with  respect  thereto.  Each  Holder
      of this  Debenture,  by

    accepting  the
      same,  (a) agrees to and shall be bound by
      such  provisions,  (b)

    authorizes  and  directs
      the Trustee on his or her behalf to take such action as

    may
      be
      necessary or appropriate  to acknowledge or effectuate
      the  subordination

    so
      provided and (c) appoints the Trustee his or her attorney-in-fact for any
      and

    all
      such
      purposes.  Each Holder hereof, by his or her acceptance
      hereof,  hereby

    waives
      all notice of the acceptance of
      the  subordination  provisions  contained

    herein
      and in the Indenture by each holder of
      Senior  Indebtedness,  whether now

    outstanding
      or hereafter incurred,  and waives reliance by each such holder
      upon

    said
      provisions.

    

           This  Debenture  shall
      not be entitled to any benefit under the Indenture

    hereinafter
      referred to, be valid or become obligatory for any purpose until
      the

    Certificate
      of  Authentication  hereon shall have been signed by or on
      behalf of

    the
      Trustee.

    

           Unless
      the Certificate of Authentication  hereon has been executed by
      the

    Trustee
      or a duly appointed Authentication Agent referred to on the reverse
      side

    hereof,  this
      Debenture shall not be entitled to any benefit under the Indenture

    or
      be
      valid or obligatory for any purpose.

    

           The
      provisions of this Debenture are continued on the reverse side
      hereof

    and
      such  continued  provisions  shall for all
      purposes  have the same effect as

    though
      fully set forth at this place.

    

    

    

           IN  WITNESS  WHEREOF,  the  Company  has  caused  this  Instrument  to
      be

    executed.

    

    

    Dated

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

    

    

                                                SOUTHWESTERN
      ELECTRIC POWER COMPANY

    

    

                                                By

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

    

    

    Attest:

    

    

    By

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

    

    

    

                         (FORM
      OF CERTIFICATE OF AUTHENTICATION)

    

                              CERTIFICATE
      OF AUTHENTICATION

    

           This
      is one of the  Debentures of the series
      of  Debentures  described in

    the
      within-mentioned Indenture.

    

    

    THE
      BANK
      OF NEW YORK

    as
      Trustee or as Authentication Agent

    

    

    By

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

    Authorized
      Signatory

    

    

                             (FORM
      OF REVERSE OF DEBENTURE)

    

           This  Debenture
      is one of a duly  authorized  series of Debentures of
      the

    Company
      (herein  sometimes  referred to as
      the  "Debentures"),  specified in the

    Indenture,  all
      issued or to be issued in one or more series  under and
      pursuant

    to
      an
      Indenture dated as of __________, ____ duly executed and delivered
      between

    the
      Company and The Bank of New York, a national
      banking  association  organized

    and
      existing under the laws of the United States, as Trustee (herein referred
      to

    as
      the
      "Trustee"),  as supplemented by the First Supplemental Indenture dated
      as

    of  __________,  ____
      between the Company and the Trustee (said  Indenture as
      so

    supplemented  being  hereinafter  referred  to
      as  the  "Indenture"),  to  which

    Indenture
      and all indentures supplemental thereto reference is hereby
      made 

    for
      a
      description of the rights, limitations of rights, obligations,

    duties
      and immunities  thereunder of the Trustee, the Company and the holders
      of

    the  Debentures.  By
      the terms of the Indenture,  the Debentures are issuable
      in

    series
      which may vary as to amount,  date
      of  maturity,  rate of interest and in

    other  respects  as
      in the  Indenture  provided.  This series
      of  Debentures  is

    limited
      in aggregate  principal  amount as specified in said
      First  Supplemental

    Indenture.

    

           Subject
      to the terms of Article Three of the Indenture, the Company shall

    have
      the
      right to redeem this  Debenture at the option of
      the  Company,  without

    premium
      or penalty, in whole or in part at any time on or after __________,
      ____

    (an
      "Optional Redemption"), at a redemption price equal to 100% of the
      principal

    amount
      plus any accrued but unpaid  interest to the date of such redemption
      (the

    "Optional  Redemption
      Price"). Any redemption pursuant to this paragraph will be

    made  upon
      not less  than 30 nor more  than
      60  days'  notice,  at
      the  Optional

    Redemption  Price.
      If the Debentures are only partially  redeemed by the
      Company

    pursuant
      to an Optional Redemption,  the Debentures will be redeemed pro rata
      or

    by
      lot or
      by any other method  utilized by the Trustee;  provided that
      if at the

    time
      of
      redemption,  the Debentures  are registered as a
      Global  Debenture,  the

    Depository  shall
      determine by lot the principal  amount of such Debentures
      held

    by
      each
      Debentureholder to be redeemed.

    

           In
      the  event  of  redemption  of  this  Debenture  in
      part  only,  a new

    Debenture
      or Debentures of this series for the unredeemed portion hereof will
      be

    issued
      in
      the name of the Holder hereof upon the cancellation hereof.

    

           In
      case an Event of  Default,  as  defined in
      the  Indenture,  shall have

    occurred  and
      be  continuing,  the  principal  of all
      of the  Debentures  may be

    declared,  and
      upon
      such  declaration  shall  become,  due
      and  payable,  in the

    manner,
      with the effect and subject to the conditions provided in the
      Indenture.

    

           The  Indenture  contains  provisions  for  defeasance  at
      any time of the

    entire  indebtedness  of
      this  Debenture  upon  compliance  by
      the Company  with

    certain
      conditions set forth therein.

    

           The
      Indenture contains provisions permitting the Company and the
      Trustee,

    with
      the  consent  of the  Holders  of not
      less  than
      a  majority  in  aggregate

    principal  amount  of
      the  Debentures  of  each  series  affected  at  the  time

    outstanding,
      as defined in the Indenture, to execute supplemental indentures for

    the
      purpose of adding any provisions to or changing in any manner or
      eliminating

    any
      of
      the  provisions of the Indenture or of
      any  supplemental  indenture or of

    modifying
      in any manner the rights of the Holders of
      the  Debentures;  provided,

    however,
      that no such supplemental indenture shall (i) extend the fixed
      maturity

    of
      any  Debentures of any series,  or reduce the
      principal  amount  thereof,  or

    reduce
      the rate or extend the time of payment of interest thereon, or reduce
      any

    premium
      payable upon the redemption  thereof,  without the consent
      of the holder

    of
      each  Debenture  so  affected  or
      (ii)  reduce
      the  aforesaid  percentage  of

    Debentures,   the  holders  of  which  are  required  to  consent  to  any  such

    supplemental  indenture,  without
      the  consent of the holders of each  Debenture

    then
      outstanding and affected  thereby.  The Indenture also
      contains  provisions

    permitting  the  Holders  of
      a
      majority  in  aggregate  principal  amount
      of the

    Debentures
      of all series at the time outstanding  affected thereby, on behalf
      of

    the
      Holders of the  Debentures of such series,  to waive any
      past default in the

    performance
      of any of the covenants  contained in the Indenture,  or
      established

    pursuant
      to the  Indenture  with respect to such
      series,  and its  consequences,

    except
      a
default
      in the payment of the  principal  of or
      premium,  if any, or interest on

    any
      of
      the  Debentures  of
      such  series.  Any  such  consent  or  waiver  by
      the

    registered  Holder  of  this  Debenture  (unless  revoked  as  provided  in  the

    Indenture)  shall
      be conclusive and binding upon such Holder and upon all future

    Holders
      and owners of this  Debenture  and of
      any  Debenture  issued in exchange

    herefor
      or in place hereof  (whether by  registration of transfer or
      otherwise),

    irrespective  of
      whether or not any  notation of such  consent or waiver is
      made

    upon
      this
      Debenture.

    

           No
      reference  herein to the Indenture and no provision of
      this  Debenture

    or
      of the
      Indenture  shall alter or impair the obligation of the
      Company,  which

    is
      absolute and unconditional,  to pay the principal of and premium, if
      any, and

    interest  on
      this  Debenture  at the time
      and  place  and at the rate and in the

    money
      herein prescribed.

    

           The  Company  shall  have
      the  right at any time  during  the term of
      the

    Debentures,  from
      time to time to
      extend  the  interest  payment  period
      of such

    Debentures
      for up to 20 consecutive  quarters
      (the  "Extended  Interest  Payment

    Period"),  at
      the end of which period the Company  shall pay
      all  interest  then

    accrued
      and unpaid (together with interest
      thereon  compounded  quarterly at the

    rate
      specified for the Debentures to the extent that payment of such interest
      is

    enforceable
      under applicable law);  provided that, during such Extended
      Interest

    Payment  Period  the  Company  shall  not  declare  or
      pay any  dividend  on, or

    purchase,  acquire
      or make
      a  liquidation  payment  with  respect
      to, any of its

    capital
      stock, or make any guarantee payments with respect thereto. Prior to
      the

    termination  of
      any
      such  Extended  Interest  Payment  Period,  the  Company
      may

    further
      extend such Extended Interest Payment Period,  provided that such
      Period

    together
      with all such previous and further  extensions thereof shall not
      exceed

    20
      consecutive quarters or extend beyond the maturity of the
      Debentures.  At the

    termination
      of any such Extended Interest Payment Period and upon the payment
      of

    all
      accrued and unpaid interest and any additional amounts then due, the
      Company

    may
      select a new Extended Interest Payment Period.

    

           As
      provided in the Indenture and subject to
      certain  limitations  therein

    set
      forth, this Debenture is transferable by the registered holder hereof on
      the

    Debenture  Register  of
      the  Company,  upon  surrender  of  this  Debenture  for

    registration
      of transfer at the office or agency of the Company accompanied by a

    written  instrument  or  instruments  of  transfer
      in form  satisfactory  to the

    Company
      or the Trustee duly executed by the  registered  Holder
      hereof or his or

    her  attorney  duly  authorized  in  writing,  and  thereupon  one
      or  more  new

    Debentures  of
      authorized  denominations  and for the
      same  aggregate  principal

    amount
      and series will be issued to the designated transferee or transferees.
      No

    service
      charge will be made for any such  transfer,  but the Company
      may require

    payment  of
      a sum  sufficient  to  cover  any tax or
      other  governmental  charge

    payable
      in relation thereto.

    

           Prior
      to due presentment for  registration of transfer of this
      Debenture,

    the
      Company,  the Trustee, any paying agent and any Debenture Registrar
      may deem

    and
      treat
      the registered  Holder hereof as the absolute owner hereof (whether
      or

    not
      this
      Debenture shall be overdue and  notwithstanding any notice of
      ownership

    or
      writing  hereon made by anyone other than
      the  Debenture  Registrar)  for the

    purpose  of  receiving  payment
      of or on  account  of
      the  principal  hereof and

    premium,
      if any, and interest due hereon and for all other purposes, and
      neither

    the
      Company nor the Trustee  nor any paying  agent nor
      any  Debenture  Registrar

    shall
      be
      affected by any notice to the contrary.

     

           No  recourse  shall
      be had for the  payment  of
      the  principal  of or the

    interest
      on this  Debenture,  or for any claim
      based  hereon,  or  otherwise  in

    respect  hereof,  or  based  on
      or in  respect  of
      the  Indenture,  against  any

    incorporator,  stockholder,  officer
      or director,  past,  present or
      future,  as

    such,
      of
      the Company or of any predecessor or successor corporation,  whether
      by

    virtue
      of
      any constitution, statute or rule of law, or by the enforcement of
      any

    assessment
      or penalty or otherwise,  all such liability being, by the
      acceptance

    hereof  and
      as part of the  consideration  for
      the  issuance  hereof,  expressly

    waived
      and released.

    

           [The  Debentures  of
      this series are  issuable  only
      in  registered  form

    without  coupons
      in  denominations  of $25 and any
      integral  multiple  thereof.]

    [This
      Global  Debenture is  exchangeable  for Debentures
      in definitive form only

    under
      certain limited  circumstances  set forth in the
      Indenture.  Debentures of

    this
      series so issued are issuable  only in registered  form
      without  coupons in

    denominations  of
      $25 and
      any  integral  multiple  thereof.]  As
      provided in the

    Indenture  and
      subject to certain  limitations  [herein  and]
      therein set forth,

    Debentures  of
      this  series [so issued] are  exchangeable  for a
      like  aggregate

    principal  amount  of  Debentures  of  this  series  of
      a  different  authorized

    denomination,
      as requested by the Holder surrendering the same.

    

           All
      terms used in this Debenture which are defined in the Indenture
      shall

    have
      the
      meanings assigned to them in the Indenture.

    

    

           FOR  VALUE  RECEIVED,  the  undersigned  hereby  sell(s),  assign(s)  and

    transfer(s)
      unto

    

    (PLEASE
      INSERT SOCIAL SECURITY OR OTHER

       IDENTIFYING
      NUMBER OF ASSIGNEE)

    

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

    

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

    

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

    (PLEASE
      PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF

    

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

    ASSIGNEE)
      the within Debenture and all rights thereunder, hereby

    

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

    irrevocably
      constituting and appointing such person attorney to

    

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

    transfer
      such Debenture on the books of the Issuer, with full

    

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

    power
      of
      substitution in the premises.

    

    

    

    Dated:

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

    

    

    

    NOTICE:       The
      signature to this  assignment must correspond with the name
      as

                  written
      upon the face of the within Debenture in every particular,

                  without  alteration  or  enlargement  or
      any change  whatever  and

                  NOTICE:
      Signature(s) must be guaranteed by a financial institution

                  that
      is a  member  of
      the  Securities  Transfer  Agents  Medallion

                  Program  ("STAMP"),  the
      Stock Exchange Medallion Program ("SEMP")

                  or
      the New York Stock Exchange,  Inc. Medallion  Signature
      Program

                  ("MSP").

    

    

                                      ARTICLE
      THREE

    

                          [PAYMENT
      OF TRUST COSTS AND EXPENSES]

    

                  [SECTION
      1. In connection  with the issuance of the  Securities
      to

    the
      Trust,  and the loan of the proceeds of the
      Preferred  Securities and Common

    Securities
      to the Company, the Company hereby covenants to pay to the Trust,
      and

    reimburse
      the Trust for, the full amount of any costs,  expenses
      or  liabilities

    of
      the
      Trust  (other  than  obligations  of the
      Trust to pay the  Holders of any

    Preferred
      Securities or Common Securities)  including,  without
      limitation,  any

    taxes,  duties
      or other  governmental  charges
      of  whatever  nature  (other than

    withholding  taxes)  imposed  on
      the Trust by the  United  States or
      any  taxing

    authority.  Such  payment  obligation  includes  any  such  costs,  expenses  or

    liabilities  of
      the Trust that are required by applicable law to be satisfied in

    connection  with
      a termination of the Trust.  The  obligations of the Company
      to

    pay
      all
      debts,  obligations,  costs and  expenses of the
      Trust  (other than with

    respect  to  amounts  owing  under  the  Common  Securities  and  the  Preferred

    Securities)
      shall survive the satisfaction and discharge of the Indenture.]

    

    

    

                                      ARTICLE
      FOUR

    

                                MISCELLANEOUS
      PROVISIONS

    

                  SECTION
      1.    This Supplemental Indenture No. 1 is a supplement
      to

    the
      Original  Indenture.  As supplemented by this
      Supplemental  Indenture No. 1,

    the  Indenture
      is in all
      respects  ratified,  approved  and  confirmed,  and
      the

    Original  Indenture  and  this  Supplemental  Indenture  No.  1  shall  together

    constitute
      one and the same instrument.

    

                  SECTION
      2.    The   recitals   contained   in  this   Supplemental

    Indenture
      No. 1 shall be taken as the  statements of the Company and the
      Trustee

    assumes
      no responsibility  for their correctness and makes no representations
      as

    to
      the
      validity or sufficiency of this Supplemental Indenture No. 1.

    

                  SECTION
      3.    This  instrument  may
      be  executed  in any number of

    counterparts,  each
      of which so executed shall be deemed to be an
      original,  but

    all
      such
      counterparts shall together constitute but one and the same
      instrument.

     

                  IN  WITNESS   WHEREOF,   the  parties   hereto  have  caused  this

    Supplemental
      Indenture No. 1 to be duly executed, and their respective corporate

    seals
      to
      be  hereunto  affixed  and  attested,  all
      as of the day and year first

    written
      above.

    

                                                SOUTHWESTERN
      ELECTRIC POWER COMPANY

    

    

                                                By:

                                                Name:

                                                Title:

    

    

    [SEAL]

    

    ATTEST:

    

    

    

                                                THE
      BANK OF NEW YORK,

                                                as
      Trustee

    

    

                                                By:

                                                Name:

                                                Title:

    

    

    [SEAL]

    

    ATTEST:

    

                                           10

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