Document:

Exhibit 4(j)(iii)

                      TRUST SECURITIES GUARANTEE AGREEMENT

                                      Among

                      American Electric Power Company, Inc.
                                 (as Guarantor)

                                       and

                         ------------------------------
                             (as Guarantee Trustee)

                        Relating to AEP Capital Trust III

                                   dated as of

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

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               Page
                                                                                                               ----
<S>                      <C>                                                                                     <C>
                                    ARTICLE I

                                   DEFINITIONS

SECTION 1.01             Definitions..............................................................................1

                                   ARTICLE II

                               TRUST INDENTURE ACT

SECTION 2.01             Trust Indenture Act; Application.........................................................3
SECTION 2.02             Lists of Holders of [Preferred Trust] Securities.........................................3
SECTION 2.03             Reports by the Guarantee Trustee.........................................................3
SECTION 2.04             Periodic Reports to Guarantee Trustee....................................................3
SECTION 2.05             Evidence of Compliance with Conditions Precedent.........................................4
SECTION 2.06             Events of Default; Waiver................................................................4
SECTION 2.07             Event of Default; Notice.................................................................4
SECTION 2.08             Conflicting Interests....................................................................4

                                   ARTICLE III

                 POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE

SECTION 3.01             Powers and Duties of the Guarantee Trustee...............................................4
SECTION 3.02             Certain Rights of Guarantee Trustee......................................................5
SECTION 3.03             Not Responsible for Recitals or Issuance of Guarantee....................................7

                                   ARTICLE IV

                                GUARANTEE TRUSTEE

SECTION 4.01             Guarantee Trustee; Eligibility...........................................................7
SECTION 4.02             Compensation, Reimbursement and Indemnity................................................7
SECTION 4.03             Appointment, Removal and Resignation of Guarantee Trustee................................8

                                    ARTICLE V

                                    GUARANTEE

SECTION 5.01             Guarantee................................................................................8
SECTION 5.02             Waiver of Notice and Demand..............................................................8
SECTION 5.03             Obligations Not Affected.................................................................8
SECTION 5.04             Rights of Holders........................................................................9
SECTION 5.05             Guarantee of Payment.....................................................................9
SECTION 5.06             Subrogation..............................................................................9
SECTION 5.07             Independent Obligations.................................................................10

                                   ARTICLE VI

                                  SUBORDINATION
</TABLE>

                                      (i)

<PAGE>

<TABLE>
<S>                      <C>                                                                                     <C>
SECTION 6.01             Subordination...........................................................................10

                                   ARTICLE VII

                                   TERMINATION

SECTION 7.01             Termination.............................................................................10

                                  ARTICLE VIII

                                  MISCELLANEOUS

SECTION 8.01             Successors and Assigns..................................................................10
SECTION 8.02             Amendments..............................................................................10
SECTION 8.03             Notices.................................................................................10
SECTION 8.04             Benefit.................................................................................11
SECTION 8.05             Interpretation..........................................................................11
SECTION 8.06             Governing Law...........................................................................12
SECTION 8.07             Counterparts............................................................................12
</TABLE>

                                      (ii)

<PAGE>

                             CROSS-REFERENCE TABLE*
                             ----------------------

Section of                                                   Section of
Trust Indenture Act                                          Guarantee
of 1939, as amended                                          Agreement
-------------------                                          ---------
310(a)......................................................  4.01(a)
310(b)......................................................  4.01(c), 2.08
310(c)......................................................  Inapplicable
311(a)......................................................  2.02(b)
311(b)......................................................  2.02(b)
311(c)......................................................  Inapplicable
312(a)......................................................  2.02(a)
312(b)......................................................  2.02(b)
313.........................................................  2.03
314(a)......................................................  2.04
314(b)......................................................  Inapplicable
314(c)......................................................  2.05
314(d)......................................................  Inapplicable
314(e)......................................................  1.01, 2.05, 3.02
314(f)......................................................  2.01
315(a)......................................................  3.01, 3.02
315(b)......................................................  2.07
315(c)......................................................  3.01
315(d)......................................................  3.01(c)
316(a)......................................................  5.04, 2.06
316(b)......................................................  5.03
316(c)......................................................  8.02
317(a)......................................................  Inapplicable
317(b)......................................................  Inapplicable
318(a)......................................................  2.01(b)
318(b)......................................................  2.01
318(c)......................................................  2.01(a)

-------------
*    This Cross-Reference Table does not constitute part of the Guarantee
     Agreement and shall not affect the interpretation of any of its terms or
     provisions.

                                      (iii)

<PAGE>

                      TRUST SECURITIES GUARANTEE AGREEMENT

     This TRUST SECURITIES GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as
of ____________, is executed and delivered by American Electric Power Company,
Inc., a New York corporation (the "Guarantor"), and
______________________________, as trustee (the "Guarantee Trustee"), for the
benefit of the Holders (as defined herein) from time to time of the Preferred
Trust Securities [and Common Trust Securities] ([each] as defined herein [and
together, the "Securities"]) of AEP Capital Trust III, a Delaware statutory
business trust (the "Issuer").

     WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of _____________among the Trustees named therein, American
Electric Power Company, Inc., as Depositor and Trust Securities Guarantor and
the several Holders (as defined therein), the Issuer is issuing as of the date
hereof $_____________ aggregate Liquidation Amount of its __%
___________________________ Securities (the "Preferred Trust Securities")
representing undivided beneficial interests in the assets of the Issuer and
having the terms set forth in the Trust Agreement;

     WHEREAS, the Preferred Trust Securities are to be issued for sale by the
Issuer and the proceeds [thereof, together with the proceeds from the issuance
of the Issuer's Common Trust Securities (as defined herein)] are to be invested
in $___________ principal amount of Debentures (as defined in the Trust
Agreement) [of the Debenture Issuer, which Debentures will be deposited with
Wilmington Trust Company, as Property Trustee under the Trust Agreement, as
trust assets]; and

     WHEREAS, as an incentive for Holders to purchase Preferred Trust
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and conditions
set forth herein;

     NOW, THEREFORE, in consideration of the purchase of Debentures, which
purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor
executes and delivers this Guarantee Agreement for the benefit of the Holders
from time to time.

                                    ARTICLE I

                                   DEFINITIONS

     SECTION 1.01 Definitions.As used in this Guarantee Agreement, the terms set
forth below shall, unless the context otherwise requires, have the following
meanings. Capitalized or otherwise defined terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the Trust Agreement as
in effect on the date hereof.

     "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

     ["Common Trust Securities" means the common securities representing
undivided beneficial interests in the assets of the Issuer that will be issued
to American Electric Power Company, Inc., as Depositor.]

     "Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Guarantee Agreement; provided, however, that,
except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default from the Guarantee Trustee or
any Holder (with a copy to the Guarantee Trustee) and shall not have cured such
default within 90 days after receipt of such notice.

<PAGE>

     "Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the [Preferred Trust] Securities, to the extent not
paid or made by or on behalf of the Issuer: (i) any accrued and unpaid
Distributions that are required to be paid on such [Preferred Trust] Securities
but only if and to the extent that the Property Trustee has available in the
Payment Account funds sufficient to make such payment at such time, (ii) the
redemption price (the "Redemption Price"), and all accrued and unpaid
Distributions to the date of redemption, with respect to the [Preferred Trust]
Securities called for redemption by the Issuer but only if and to the extent
that the Property Trustee has available in the Payment Account funds sufficient
to make such payment, (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Issuer (other than in connection with the
distribution of Debentures to the Holders in exchange for [Preferred Trust]
Securities as provided in the Trust Agreement or upon a redemption of all of the
[Preferred Trust] Securities upon maturity or redemption of the Debentures as
provided in the Trust Agreement), the lesser of (a) the aggregate of the
Liquidation Amount of all [Preferred Trust] Securities and all accrued and
unpaid Distributions on the [Preferred Trust] Securities to the date of payment
but only if and to the extent that the Property Trustee has available in the
Payment Account funds sufficient to make such payment at such time, and (b) the
amount of assets of the Issuer remaining available for distribution to Holders
in liquidation of the Issuer after satisfaction of liabilities to creditors of
the Issuer as required by applicable law (in either case, the "Liquidation
Distribution").

     "Guarantee Trustee" means ______________________________, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.

     "Holder" means a Person in whose name a [Preferred Trust] Security or
[Preferred Trust] Securities is registered in the Securities Register; provided,
however, that in determining whether the holders of the requisite percentage of
[Preferred Trust] Securities have given any request, notice, consent or waiver
hereunder, "Holder" shall not include the Guarantor or any Affiliate of the
Guarantor.

     "Majority in Liquidation Amount of the [Preferred Trust] Securities" means
a vote by Holders, voting separately as a class, of more than 50% of the
aggregate Liquidation Amount of all then outstanding [Preferred Trust]
Securities.

     "Officer's Certificate" means a certificate signed by the Chairman or a
Vice Chairman of the Board of Directors, the President, any Vice President, the
Treasurer, or any Assistant Treasurer of the Guarantor, and delivered to the
Guarantee Trustee. Any Officer's Certificate or Opinion of Counsel delivered
with respect to compliance with a condition or covenant provided for in this
Guarantee Agreement shall include:

          (a) a statement that the officer or counsel signing the Officer's
     Certificate or the Opinion of Counsel has read the covenant or condition
     and the definitions relating thereto;

          (b) a brief statement of the nature and scope of the examination or
     investigation undertaken by each officer in rendering the Officer's
     Certificate or the Opinion of Counsel;

          (c) a statement that each such officer or counsel has made such
     examination or investigation as, in such officer's or counsel's opinion, is
     necessary to enable such officer or counsel to express an informed opinion
     as to whether or not such covenant or condition has been complied with; and

          (d) a statement as to whether, in the opinion of each such officer or
     counsel, such condition or covenant has been complied with.

     "Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Guarantee Trustee or the Guarantor or an Affiliate of the Guarantor, or
an employee or any thereof, who shall be acceptable to the Guarantee Trustee.

     "Person" means any individual, corporation, partnership, joint venture,
trust, limited liability company, unincorporated organization or government, or
any agency or political subdivision thereof, or any other entity of whatever
nature.

                                      -2-

<PAGE>

     "Responsible Officer" means, with respect to the Guarantee Trustee, any
vice-president, any assistant vice-president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any senior trust officer, any
trust officer or assistant trust officer or any other officer in the Corporate
Trust Department of the Guarantee Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.

     "Subordinated Indenture" means the Indenture dated as of ____________,
____, among the Guarantor, the Debenture Issuer and
______________________________, as trustee pursuant to which the Debentures are
issued, together with any indenture supplemental thereto.

     "Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.01.

     "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.

                                   ARTICLE II

                               TRUST INDENTURE ACT

     SECTION 2.01 Trust Indenture Act; Application.(a) This Guarantee Agreement
is subject to the provisions of the Trust Indenture Act that are required or
deemed to be part of this Guarantee Agreement and shall, to the extent
applicable, be governed by such provisions; and

          (b) if and to the extent that any provision of this Guarantee
     Agreement limits, qualifies or conflicts with the duties imposed by Section
     310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
     shall control.

     SECTION 2.02 Lists of Holders of [Preferred Trust] Securities.(a) The
Guarantor shall furnish or cause to be furnished to the Guarantee Trustee (a)
semiannually, not later than ________ __ and ____ __ in each year, a list, in
such form as the Guarantee Trustee may reasonably require, of the names and
addresses of the Holders ("List of Holders") as of a date not more than 15 days
prior to the delivery thereof, and (b) at such other times as the Guarantee
Trustee may request in writing, within 30 days after the receipt by the
Guarantor of any such request, a List of Holders as of a date not more than 15
days prior to the time such list is furnished; provided that, the Guarantor
shall not be obligated to provide such List of Holders at any time the List of
Holders does not differ from the most recent List of Holders given to the
Guarantee Trustee by the Guarantor. The Guarantee Trustee may destroy any List
of Holders previously given to it on receipt of a new List of Holders.

          (b) The Guarantee Trustee shall comply with its obligations under
     Section 311(a) of the Trust Indenture Act, subject to the provisions of
     Section 311(b) of the Trust Indenture Act, and Section 312(b) of the Trust
     Indenture Act.

     SECTION 2.03 Reports by the Guarantee Trustee.Within 60 days after each
____________, commencing ________________, the Guarantee Trustee shall provide
to the Holders such reports, if any, as are required by Section 313(a) of the
Trust Indenture Act in the form and in the manner provided by Section 313(a) of
the Trust Indenture Act. Any such report shall be dated as of the next preceding
____________. The Guarantee Trustee shall also comply with the other
requirements of Section 313 of the Trust Indenture Act.

     SECTION 2.04 Periodic Reports to Guarantee Trustee.The Guarantor shall
provide to the Guarantee Trustee, the Securities and Exchange Commission and the
Holders such documents, reports and information, if any, as required by Section
314 of the Trust Indenture Act and the compliance certificate required by
Section 314(a)(4) of the Trust Indenture Act in the form, in the manner and at
the times required by Section 314 of

                                      -3-

<PAGE>

the Trust Indenture Act, provided that such compliance certificate shall be
delivered annually on or before _________ in each year, beginning _____________.

     SECTION 2.05 Evidence of Compliance with Conditions Precedent.The Guarantor
shall provide to the Guarantee Trustee such evidence of compliance with any
conditions precedent provided for in this Guarantee Agreement as and to the
extent required by Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to Section 314(c) of the
Trust Indenture Act may be given in the form of an Officer's Certificate.

     SECTION 2.06 Events of Default; Waiver.(a) The Holders of a Majority in
Liquidation Amount of [Preferred Trust] Securities may, by vote, on behalf of
all of the Holders, waive any past Event of Default and its consequences. Upon
such waiver, any such Event of Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Guarantee Agreement, but no such waiver shall extend to any subsequent
or other default or Event of Default or impair any right consequent thereon.

          (b) The right of any Holder to receive payment of the Guarantee
     Payments in accordance with this Guarantee Agreement, or to institute suit
     for the enforcement of any such payment, shall not be impaired without the
     consent of each such Holder.

     SECTION 2.07 Event of Default; Notice.(a) The Guarantee Trustee shall,
within 90 days after the occurrence of an Event of Default, transmit by mail,
first class postage prepaid, to the Holders, a notice of such Event of Default
known to the Guarantee Trustee, unless such default shall have been cured or
waived before the giving of such notice, provided that, except in the case of a
default in the payment of a Guarantee Payment, the Guarantee Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors or Responsible
Officers of the Guarantee Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders.

          (b) The Guarantee Trustee shall not be deemed to have knowledge of any
     Event of Default unless the Guarantee Trustee shall have received written
     notice, or a Responsible Officer of the Guarantee Trustee charged with the
     administration of this Guarantee Agreement shall have received written
     notice, in each case from the Guarantor or a Holder, of such Event of
     Default.

     SECTION 2.08 Conflicting Interests.The Trust Agreement, the Subordinated
Indenture and the securities of any series issued thereunder [OTHERS] shall be
deemed to be specifically described in this Guarantee Agreement for the purposes
of clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.

                                   ARTICLE III

                 POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE

     SECTION 3.01 Powers and Duties of the Guarantee Trustee.(a) This Guarantee
Agreement shall be held by the Guarantee Trustee for the benefit of the Holders,
and the Guarantee Trustee shall not transfer this Guarantee Agreement or any
rights hereunder to any Person except a Holder exercising his or her rights
pursuant to Section 5.04 or to a Successor Guarantee Trustee on acceptance by
such Successor Guarantee Trustee of its appointment to act as Successor
Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, and such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.

          (b) The Guarantee Trustee, prior to the occurrence of any Event of
     Default and after the curing or waiving of all Events of Default that may
     have occurred, shall undertake to perform such duties and only such duties
     as are specifically set forth in this Guarantee Agreement, and no implied
     covenants or

                                      -4-

<PAGE>

     obligations shall be read into this Guarantee Agreement against the
     Guarantee Trustee. In case an Event of Default has occurred (that has not
     been cured or waived pursuant to Section 2.06), the Guarantee Trustee shall
     exercise such of the rights and powers vested in it by this Guarantee
     Agreement, and use the same degree of care and skill in its exercise
     thereof, as a prudent person would exercise or use under the circumstances
     in the conduct of his or her own affairs.

          (c) No provision of this Guarantee Agreement shall be construed to
     relieve the Guarantee Trustee from liability for its own negligent action,
     its own negligent failure to act, or its own willful misconduct, except
     that:

               (i) prior to the occurrence of any Event of Default and after the
          curing or waiving of all such Events of Default that may have
          occurred:

                    (A) the duties and obligations of the Guarantee Trustee
               shall be determined solely by the express provisions of this
               Guarantee Agreement, and the Guarantee Trustee shall not be
               liable except for the performance of such duties and obligations
               as are specifically set forth in this Guarantee Agreement; and

                    (B) in the absence of bad faith on the part of the Guarantee
               Trustee, the Guarantee Trustee may conclusively rely, as to the
               truth of the statements and the correctness of the opinions
               expressed therein, upon any certificates or opinions furnished to
               the Guarantee Trustee and conforming to the requirements of this
               Guarantee Agreement; but in the case of any such certificates or
               opinions that by any provision hereof or of the Trust Indenture
               Act are specifically required to be furnished to the Guarantee
               Trustee, the Guarantee Trustee shall be under a duty to examine
               the same to determine whether or not they conform to the
               requirements of this Guarantee Agreement;

               (ii) the Guarantee Trustee shall not be liable for any error of
          judgment made in good faith by a Responsible Officer of the Guarantee
          Trustee, unless it shall be proved that the Guarantee Trustee was
          negligent in ascertaining the pertinent facts upon which such judgment
          was made;

               (iii) the Guarantee Trustee shall not be liable with respect to
          any action taken or omitted to be taken by it in good faith in
          accordance with the direction of the Holders of a Majority in
          Liquidation Amount of the [Preferred Trust] Securities relating to the
          time, method and place of conducting any proceeding for any remedy
          available to the Guarantee Trustee, or exercising any trust or power
          conferred upon the Guarantee Trustee under this Guarantee Agreement;
          and

               (iv) no provision of this Guarantee Agreement shall require the
          Guarantee Trustee to expend or risk its own funds or otherwise incur
          any financial liability in the performance of any of its duties
          hereunder, or in the exercise of any of its rights or powers, if the
          Guarantee Trustee shall have reasonable grounds for believing that the
          repayment of such funds or liability is not reasonably assured to it
          under the terms of this Guarantee Agreement or adequate indemnity,
          reasonably satisfactory to the Guarantee Trustee, against such risk or
          liability is not reasonably assured to it.

     SECTION 3.02 Certain Rights of Guarantee Trustee.(a) Subject to the
provisions of Section 3.01:

               (i) the Guarantee Trustee may rely and shall be fully protected
          in acting or refraining from acting upon any resolution, certificate,
          statement, instrument, opinion, report, notice, request, direction,
          consent, order, bond, debenture, note, other evidence of indebtedness
          or other paper or document reasonably believed by it to be genuine and
          to have been signed, sent or presented by the proper party or parties;

                                      -5-

<PAGE>

               (ii) any direction or act of the Guarantor contemplated by this
          Guarantee Agreement shall be sufficiently evidenced by an Officer's
          Certificate, or as otherwise expressly provided herein;

               (iii) whenever, in the administration of this Guarantee
          Agreement, the Guarantee Trustee shall deem it desirable that a matter
          be proved or established before taking, suffering or omitting to take
          any action hereunder, the Guarantee Trustee (unless other evidence is
          herein specifically prescribed) may, in the absence of bad faith on
          its part, request and rely upon an Officer's Certificate which, upon
          receipt of such request from the Guarantee Trustee, shall be promptly
          delivered by the Guarantor;

               (iv) the Guarantee Trustee may consult with counsel of its
          choice, and the written advice or Opinion of Counsel with respect to
          legal matters shall be full and complete authorization and protection
          in respect of any action taken, suffered or omitted by it hereunder in
          good faith and in accordance with such advice or opinion; such counsel
          may be counsel to the Guarantee Trustee, the Guarantor or any of its
          Affiliates and may include any of its employees; the Guarantee Trustee
          shall have the right at any time to seek instructions concerning the
          administration of this Guarantee Agreement from any court of competent
          jurisdiction;

               (v) the Guarantee Trustee shall be under no obligation to
          exercise any of the rights or powers vested in it by this Guarantee
          Agreement at the request or direction of any Holder, unless such
          Holder shall have provided to the Guarantee Trustee such adequate
          security and indemnity as would satisfy a reasonable person in the
          position of the Guarantee Trustee, against the costs, expenses
          (including attorneys' fees and expenses) and liabilities that might be
          incurred by it in complying with such request or direction, including
          such reasonable advances as may be requested by the Guarantee Trustee;
          provided that, nothing contained in this Section 3.02(a)(v) shall be
          taken to relieve the Guarantee Trustee, upon the occurrence and
          continuance of an Event of Default, of its obligation under the last
          sentence of Section 3.01(b) to exercise the rights and powers vested
          in it by this Guarantee Agreement;

               (vi) the Guarantee Trustee shall not be bound to make any
          investigation into the facts or matters stated in any resolution,
          certificate, statement, instrument, opinion, report, notice, request,
          direction, consent, order, bond, debenture, note, other evidence of
          indebtedness or other paper or document, but the Guarantee Trustee, in
          its discretion, may make such further inquiry or investigation into
          such facts or matters as it may see fit;

               (vii) the Guarantee Trustee may execute any of the trusts or
          powers hereunder or perform any duties hereunder either directly or by
          or through agents or attorneys, and the Guarantee Trustee shall not be
          responsible for any misconduct or negligence on the part of any such
          agent or attorney appointed with due care by it hereunder;

               (viii) whenever in the administration of this Guarantee Agreement
          the Guarantee Trustee shall deem it desirable to receive instructions
          with respect to enforcing any remedy or right or taking any other
          action hereunder, the Guarantee Trustee (1) may request instructions
          from the Holders of a Majority in Liquidation Amount of the Preferred
          Trust Securities, (2) may refrain from enforcing such remedy or right
          or taking such other action until such instructions are received, and
          (3) shall be protected in relying on or acting in accordance with such
          instructions;

               (ix) the Guarantee Trustee shall have no duty to see to any
          recording, filing or registration of any instrument (including any
          financing or continuation statement or any tax or securities form) (or
          any rerecording, refiling or re-registration thereof); and

               (x) the Guarantee Trustee shall not be liable for any action
          taken, suffered or omitted to be taken by it in good faith and
          reasonably believed by it to be authorized or within the discretion or
          rights or powers conferred upon it by this Guarantee Agreement.

                                      -6-

<PAGE>

          (c) No provision of this Guarantee Agreement shall be deemed to impose
     any duty or obligation on the Guarantee Trustee to perform any act or acts
     or exercise any right, power, duty or obligation conferred or imposed on it
     in any jurisdiction in which it shall be illegal, or in which the Guarantee
     Trustee shall be unqualified or incompetent in accordance with applicable
     law, to perform any such act or acts or to exercise any such right, power,
     duty or obligation. No permissive power or authority available to the
     Guarantee Trustee shall be construed to be a duty to act in accordance with
     such power or authority.

     SECTION 3.03 Not Responsible for Recitals or Issuance of Guarantee.The
recitals contained in this Guarantee Agreement shall be taken as the statements
of the Guarantor, and the Guarantee Trustee does not assume any responsibility
for their correctness. The Guarantee Trustee makes no representation as to the
validity or sufficiency of this Guarantee Agreement.

                                   ARTICLE IV

                                GUARANTEE TRUSTEE

     SECTION 4.01 Guarantee Trustee; Eligibility.(a) There shall at all times be
a Guarantee Trustee which shall:

               (i) not be an Affiliate of the Guarantor; and

               (ii) be a corporation organized and doing business under the laws
          of the United States of America or any State or Territory thereof or
          of the District of Columbia, or a corporation or Person permitted by
          the Securities and Exchange Commission to act as an institutional
          trustee under the Trust Indenture Act, authorized under such laws to
          exercise corporate trust powers, having a combined capital and surplus
          of at least 50 million U.S. dollars ($50,000,000), and subject to
          supervision or examination by Federal, State, Territorial or District
          of Columbia authority. If such corporation publishes reports of
          condition at least annually, pursuant to law or to the requirements of
          the supervising or examining authority referred to above, then, for
          the purposes of this Section 4.01(a)(ii), the combined capital and
          surplus of such corporation shall be deemed to be its combined capital
          and surplus as set forth in its most recent report of condition so
          published.

          (b) If at any time the Guarantee Trustee shall cease to be eligible to
     so act under Section 4.01(a), the Guarantee Trustee shall immediately
     resign in the manner and with the effect set out in Section 4.03(c).

          (c) If the Guarantee Trustee has or shall acquire any "conflicting
     interest" within the meaning of Section 310(b) of the Trust Indenture Act,
     the Guarantee Trustee and Guarantor shall in all respects comply with the
     provisions of Section 310(b) of the Trust Indenture Act.

     SECTION 4.02 Compensation, Reimbursement and Indemnity.The Guarantor agrees
to pay to the Guarantee Trustee from time to time reasonable compensation for
all services rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an express
trust), to reimburse the Guarantee Trustee upon request for all reasonable
expenses, disbursements and advances (including the reasonable fees and expenses
of its attorneys and agents) incurred or made by the Guarantee Trustee in
accordance with any provision of this Guarantee Agreement and to indemnify each
of the Guarantee Trustee and any predecessor Guarantee Trustee for, and to hold
it harmless against, any and all loss, damage, claim, liability or expense,
including taxes (other than taxes based upon the income of the Guarantee
Trustee) incurred without negligence, willful misconduct or bad faith on its
part, arising out of or in connection with the acceptance of the trusts created
by, or the administration of, this Guarantee Agreement, including the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder. The
obligations of the Guarantor under this Section shall survive the termination of
this Guarantee Agreement and the resignation or removal of the Guarantee
Trustee.

                                      -7-

<PAGE>

     SECTION 4.03 Appointment, Removal and Resignation of Guarantee Trustee.(a)
Subject to Section 4.03(b), the Guarantee Trustee may be appointed or removed
without cause at any time by the Guarantor.

          (b) The Guarantee Trustee shall not be removed until a Successor
     Guarantee Trustee has been appointed by the Guarantor and has accepted such
     appointment by written instrument executed by such Successor Guarantee
     Trustee and delivered to the Guarantor.

          (c) The Guarantee Trustee appointed to office shall hold office until
     a Successor Guarantee Trustee shall have been appointed or until its
     removal or resignation. The Guarantee Trustee may resign from office
     (without need for prior or subsequent accounting) by an instrument in
     writing executed by the Guarantee Trustee and delivered to the Guarantor,
     which resignation shall not take effect until a Successor Guarantee Trustee
     has been appointed and has accepted such appointment by instrument in
     writing executed by such Successor Guarantee Trustee and delivered to the
     Guarantor and the resigning Guarantee Trustee.

          (d) If no Successor Guarantee Trustee shall have been appointed and
     accepted appointment as provided in this Section 4.02 within 60 days after
     delivery to the Guarantor of an instrument of resignation or removal, the
     Guarantee Trustee resigning or being removed may petition any court of
     competent jurisdiction for appointment of a Successor Guarantee Trustee.
     Such court may thereupon, after prescribing such notice, if any, as it may
     deem proper, appoint a Successor Guarantee Trustee.

          (e) No Guarantee Trustee shall be liable for the acts or omissions to
     act of any Successor Guarantee Trustee.

                                    ARTICLE V

                                    GUARANTEE

     SECTION 5.01 Guarantee.The Guarantor irrevocably and unconditionally agrees
to pay in full to the Holders the Guarantee Payments (without duplication of
amounts theretofore paid by or on behalf of the Issuer), as and when due,
regardless of any defense, right of set-off or counterclaim which the Issuer may
have or assert. The Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Guarantor to the
Holders or by causing the Issuer to pay such amounts to the Holders.

     SECTION 5.02 Waiver of Notice and Demand.The Guarantor hereby waives notice
of acceptance of this Guarantee Agreement and of any liability to which it
applies or may apply, presentment, demand for payment, any right to require a
proceeding first against the Guarantee Trustee, Issuer or any other Person
before proceeding against the Guarantor, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and demands.

     SECTION 5.03 Obligations Not Affected.The obligation of the Guarantor to
make the Guarantee Payments under this Guarantee Agreement shall in no way be
affected or impaired by reason of the happening from time to time of any of the
following:

          (a) the release or waiver, by operation of law or otherwise, of the
     performance or observance by the Issuer of any express or implied
     agreement, covenant, term or condition relating to the [Preferred Trust]
     Securities to be performed or observed by the Issuer;

          (b) the extension of time for the payment by the Issuer of all or any
     portion of the Distributions, Redemption Price, Liquidation Distribution or
     any other sums payable under the terms of the [Preferred Trust] Securities
     or the extension of time for the performance of any other obligation under,
     arising out of, or in connection with, the [Preferred Trust] Securities
     (other than an extension of time for payment of Distributions, Redemption
     Price, Liquidation Distribution or other sum payable that results

                                      -8-

<PAGE>

     from the extension of any interest payment period on the Debentures
     permitted by the Subordinated Indenture);

          (c) any failure, omission, delay or lack of diligence on the part of
     the Holders to enforce, assert or exercise any right, privilege, power or
     remedy conferred on the Holders pursuant to the terms of the [Preferred
     Trust] Securities, or any action on the part of the Issuer granting
     indulgence or extension of any kind;

          (d) the voluntary or involuntary liquidation, dissolution, sale of any
     collateral, receivership, insolvency, bankruptcy, assignment for the
     benefit of creditors, reorganization, arrangement, composition or
     readjustment of debt of, or other similar proceedings affecting, the Issuer
     or any of the assets of the Issuer;

          (e) any invalidity of, or defect or deficiency in, the [Preferred
     Trust] Securities;

          (f) the settlement or compromise of any obligation guaranteed hereby
     or hereby incurred; or

          (g) any other circumstance whatsoever that might otherwise constitute
     a legal or equitable discharge or defense of a guarantor, it being the
     intent of this Section 5.03 that the obligations of the Guarantor hereunder
     shall be absolute and unconditional under any and all circumstances.

There shall be no obligation of the Holders to give notice to, or obtain consent
of, the Guarantor with respect to the happening of any of the foregoing.

     SECTION 5.04 Rights of Holders.The Guarantor expressly acknowledges that:
(i) this Guarantee Agreement will be deposited with the Guarantee Trustee to be
held for the benefit of the Holders; (ii) the Guarantee Trustee has the right to
enforce this Guarantee Agreement on behalf of the Holders; (iii) the Holders of
a Majority in Liquidation Amount of the [Preferred Trust] Securities have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Guarantee Trustee in respect of this Guarantee Agreement
or exercising any trust or power conferred upon the Guarantee Trustee under this
Guarantee Agreement, provided, however, that, subject to Section 3.01, the
Guarantee Trustee shall have the right to decline to follow any such direction
if the Guarantee Trustee being advised by counsel determines that the action so
directed may not lawfully be taken, or if the Guarantee Trustee in good faith
shall, by a Responsible Officer or Officers of the Guarantee Trustee, determine
that the proceedings so directed would be illegal or involve it in personal
liability or be unduly prejudicial to the rights of Holders not party to such
direction, and provided further that nothing in this Trust Agreement shall
impair the right of the Guarantee Trustee to take any action deemed proper by
the Guarantee Trustee which is not inconsistent with such direction; and (iv)
any Holder may enforce this Guarantee Agreement, or institute a legal proceeding
directly against the Guarantor to enforce the Guarantee Trustee's rights under
this Guarantee Agreement without first instituting a legal proceeding against
the Issuer, the Guarantee Trustee, or any other Person.

     SECTION 5.05 Guarantee of Payment.This Guarantee Agreement creates a
guarantee of payment and not of collection. This Guarantee Agreement will not be
discharged except by payment of the Guarantee Payments in full (without
duplication) or upon the distribution of Debentures as provided in the Trust
Agreement.

     SECTION 5.06 Subrogation.The Guarantor shall be subrogated to all, if any,
rights of the Holders against the Issuer in respect of any amounts paid to the
Holders by the Guarantor under this Guarantee Agreement; provided, however, that
the Guarantor shall not (except to the extent required by mandatory provisions
of law) be entitled to enforce or exercise any rights which it may acquire by
way of subrogation or any indemnity, reimbursement or other agreement, in all
cases as a result of payment under this Guarantee Agreement, if, at the time of
any such payment, any amounts of Guarantee Payments are due and unpaid under
this Guarantee Agreement. If any amount shall be paid to the Guarantor in
violation of the preceding sentence, the Guarantor agrees to hold such amount in
trust for the Holders and to pay over such amount to the Holders.

                                      -9-

<PAGE>

     SECTION 5.07 Independent Obligations.The Guarantor acknowledges that its
obligations hereunder are independent of the obligations of the Issuer with
respect to the [Preferred Trust] Securities and that the Guarantor shall be
liable as principal and as debtor hereunder to make Guarantee Payments pursuant
to the terms of this Guarantee Agreement notwithstanding the occurrence of any
event referred to in subsections (a) through (g), inclusive, of Section 5.03.

                                   ARTICLE VI

                                  SUBORDINATION

     SECTION 6.01 Subordination.This Guarantee Agreement will constitute an
unsecured obligation of the Guarantor and will rank (i) subordinate and junior
in right of payment to all other liabilities of the Guarantor, including the
guarantee of the Debentures, except those made pari passu or subordinate by
their terms, (ii) pari passu with the most senior preferred or preference stock
now or hereafter issued by the Guarantor and with any guarantee now or hereafter
entered into by the Guarantor in respect of any preferred or preference stock of
any Affiliate of the Guarantor, and (iii) senior to all common stock of the
Guarantor. [When a Debenture Event of Default (as defined in the Trust
Agreement) occurs and is continuing, the rights of holders of the Common Trust
Securities to payment in respect of Distributions and payments upon liquidation,
redemption or otherwise are subordinated to the rights to payment of holders of
Preferred Trust Securities.] Each Person, by virtue of having become a Holder of
a Security, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Guarantee Agreement, the Trust Agreement and the
Subordinated Indenture.

                                   ARTICLE VII

                                   TERMINATION

     SECTION 7.01 Termination.This Guarantee Agreement shall terminate and be of
no further force and effect upon: (i) full payment of the Redemption Price of
all [Preferred Trust] Securities, and all accrued and unpaid Distributions to
the date of redemption, (ii) the distribution of Debentures to Holders in
exchange for all of the [Preferred Trust] Securities, or (iii) full payment of
the amounts payable in accordance with the Trust Agreement upon liquidation of
the Issuer. Notwithstanding the foregoing, this Guarantee Agreement will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder must restore payment of any sums paid with respect to [Preferred
Trust] Securities or under this Guarantee Agreement.

                                  ARTICLE VIII

                                  MISCELLANEOUS

     SECTION 8.01 Successors and Assigns.All guarantees and agreements contained
in this Guarantee Agreement shall bind the successors, assigns, receivers,
trustees and representatives of the Guarantor and shall inure to the benefit of
the Holders of the [Preferred Trust] Securities then outstanding. Except in
connection with a consolidation, merger or sale involving the Guarantor that is
permitted under Article Eleven of the Subordinated Indenture and pursuant to
which the assignee agrees in writing to perform the Guarantor's obligations
hereunder, the Guarantor shall not assign its obligations hereunder.

     SECTION 8.02 Amendments.This Guarantee Agreement may be amended only by an
instrument in writing entered into by the Guarantor and the Guarantee Trustee.
Except with respect to any changes which do not materially adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Guarantee Agreement may only be amended with the prior approval of the Holders
of not less than a majority in aggregate Liquidation Amount of all the
outstanding [Preferred Trust] Securities. Any such consent shall be deemed to be
on behalf of the holders of all the [Preferred Trust] Securities. The provisions
of Article VI of the Trust Agreement concerning meetings or consents of Holders
shall apply to the giving of such approval.

     SECTION 8.03 Notices.Any notice, request or other communication required or
permitted to be given hereunder shall be in writing, duly signed by the party
giving such notice, and delivered, telecopied or mailed by first class mail as
follows:

                                      -10-

<PAGE>

          (a) if given to the Guarantor, to the address set forth below or such
     other address or facsimile number or to the attention of such other Person
     as the Guarantor may give notice of to the Guarantee Trustee and the
     Holders of the Preferred Trust Securities:

               American Electric Power Company, Inc.
               1 Riverside Plaza
               Columbus, Ohio 43215
               Facsimile No:  614-223-1687
               Attention:  Treasurer

          (b) if given to the Issuer, in care of the Administrative Trustees, at
     the Issuer's (and the Administrative Trustees') address set forth below or
     such other address or facsimile number or to the attention of such other
     Person as the Administrative Trustees on behalf of the Issuer may give
     notice of to the Guarantee Trustee and the Holders:

               AEP Capital Trust III
               c/o American Electric Power Company, Inc.
               1 Riverside Plaza
               Columbus, Ohio 43215
               Facsimile No:  614-223-1687
               Attention:  Administrative Trustees

          (c) if given to the Guarantee Trustee, to the address set forth below
     or such other address or facsimile number or to the attention of such other
     Person as the Guarantee Trustee may give notice of to the Guarantor and the
     Holders of the Preferred Trust Securities:

               ------------------------------
               450 West 33rd Street, 15th Floor
               New York, New York _____
               Facsimile No: 212-___-____
               Attention: ____________________

          (d) if given to any Holder, at the address set forth on the books and
     records of the Issuer.

     All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.

     SECTION 8.04 Benefit.This Guarantee Agreement is solely for the benefit of
the Holders and, subject to Section 3.01(a), is not separately transferable from
the Preferred Trust Securities.

     SECTION 8.05 Interpretation.In this Guarantee Agreement, unless the context
otherwise requires:

          (a) a term defined anywhere in this Guarantee Agreement has the same
     meaning throughout;

          (b) all references to "the Guarantee Agreement" or "this Guarantee
     Agreement" are to this Guarantee Agreement as modified, supplemented or
     amended from time to time;

          (c) all references in this Guarantee Agreement to Articles and
     Sections are to Articles and Sections of this Guarantee Agreement unless
     otherwise specified;

                                      -11-

<PAGE>

          (d) a term defined in the Trust Indenture Act has the same meaning
     when used in this Guarantee Agreement unless otherwise defined in this
     Guarantee Agreement or unless the context otherwise requires;

          (e) a reference to the singular includes the plural and vice versa;
     and

          (f) the masculine, feminine or neuter genders used herein shall
     include the masculine, feminine and neuter genders.

     SECTION 8.06 Governing Law.THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.

     SECTION 8.07 Counterparts.

     This Guarantee Agreement 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.

     THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.

                                        AMERICAN ELECTRIC POWER COMPANY, INC.,
                                             As Guarantor

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

                                        ------------------------------,
                                             as Guarantee Trustee

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

                                      -12-Exhibit 4(l)

================================================================================

                      AMERICAN ELECTRIC POWER COMPANY, INC.

             ______________________________________________________,
                 as Collateral Agent and Securities Intermediary

                                       and

                        _______________________________,
                           as Purchase Contract Agent

                                   ----------

                                PLEDGE AGREEMENT

                                   ----------

                            Dated as of_____________

================================================================================

<PAGE>

                                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>

                                      -i-

<PAGE>

<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

                                      -ii-

<PAGE>

                                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.

                                      -2-

<PAGE>

     "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

                                      -3-

<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.

                                      -4-

<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.

                                      -5-

<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.

                                      -7-

<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:
       --------------------

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00037-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00037-of-00352.parquet"}]]