Document:

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                                                                     Exhibit 4.2

                      AMERICAN ELECTRIC POWER COMPANY, INC.

                                       AND

                              THE BANK OF NEW YORK,
                                   as Trustee

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

                          THIRD SUPPLEMENTAL INDENTURE

                            Dated as of June 11, 2002

                                       TO

                                    INDENTURE

                             Dated as of May 1, 2001

                     5.75% Senior Notes Due August 16, 2007

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

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                               TABLE OF CONTENTS*

<TABLE>
<CAPTION>
                                   ARTICLE ONE

                GENERAL TERMS AND CONDITIONS OF THE SENIOR NOTES
     <S>                                                                                  <C>
     Section 1.1.      Definitions .....................................................   1
     Section 1.2.      Establishment, Designation and Principal Amount .................   3
     Section 1.3.      Payment of Principal and Interest ...............................   4
     Section 1.4.      Denominations ...................................................   5
     Section 1.5.      Global Securities ...............................................   5
     Section 1.6.      Remarketing .....................................................   6
     Section 1.7.      Optional Remarketing ............................................  10
     Section 1.8.      Sinking Fund ....................................................  11
     Section 1.9.      Redemption and Repurchase .......................................  11
     Section 1.10.     Covenants .......................................................  11
     Section 1.11.     Tax Event Redemption ............................................  11
     Section 1.12.     Tax Treatment ...................................................  12
     Section 1.13.     Events of Default ...............................................  13

                                   ARTICLE II

                            MISCELLANEOUS PROVISIONS

     Section 2.1.      Recitals by Company .............................................  16
     Section 2.2.      Ratification and Incorporation of Original Indenture ............  16
     Section 2.3.      Executed in Counterparts ........................................  16
     Section 2.4.      Separability ....................................................  16
     Section 2.5.      Governing Law ...................................................  16

     Exhibit A         Form of Senior Note .............................................  A-1
</TABLE>

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* This Table of Contents does not constitute part of the Indenture or have
  any bearing upon the interpretation of any of its terms and provisions.

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               THIRD SUPPLEMENTAL INDENTURE, dated as of June 11, 2002 (the
"Third Supplemental Indenture"), between AMERICAN ELECTRIC POWER COMPANY, INC.,
a corporation duly organized and existing under the laws of the State of New
York (hereinafter sometimes referred to as the "Company"), and THE BANK OF NEW
YORK, a New York banking corporation, as trustee (hereinafter sometimes referred
to as the "Trustee"), under the Indenture dated as of May 1, 2001 between the
Company and the Trustee (the "Original Indenture"). The Original Indenture, as
previously supplemented from time to time, including by this Third Supplemental
Indenture, is hereafter referred to as the "Indenture."

                                   WITNESSETH:

          WHEREAS, the Company has executed and delivered the Original Indenture
to the Trustee to provide for the issuance of unsecured promissory notes or
other evidences of indebtedness (the "Securities") in an unlimited aggregate
principal amount, to be issued from time to time in one or more series as
provided in the Original Indenture; and

          WHEREAS, pursuant to the terms of the Original Indenture, the Company
desires to provide for the establishment of a new series of its Securities (said
series being hereinafter referred to as the "Senior Notes"), the form and
substance of such Senior Notes and the terms, provisions and conditions thereof
to be set forth as provided in the Original Indenture and this Third
Supplemental Indenture; and

          WHEREAS, the Company desires and has requested the Trustee to join
with it in the execution and delivery of this Third Supplemental Indenture, and
all requirements necessary to make this Third Supplemental Indenture a valid
instrument, in accordance with its terms, and to make the Senior Notes, when
executed by the Company and authenticated and delivered by the Trustee, the
valid obligations of the Company, have been performed and fulfilled, and the
execution and delivery hereof have been in all respects duly authorized;

          NOW THEREFORE, in consideration of the purchase and acceptance of the
Senior Notes by the holders thereof, and for the purpose of setting forth, as
provided in the Original Indenture, the form and substance of the Senior Notes
and the terms, provisions and conditions thereof, the Company covenants and
agrees with the Trustee as follows:

                                  ARTICLE ONE

                GENERAL TERMS AND CONDITIONS OF THE SENIOR NOTES

          SECTION 1.1.    Definitions.

               Except as otherwise expressly provided in or pursuant to this
Third Supplemental Indenture or unless the context otherwise requires:

               (1)  a term defined in the Original Indenture has the same
          meaning when used in this Third Supplemental Indenture;

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               (2)  a term defined anywhere in this Third Supplemental Indenture
          has the same meaning throughout;

               (3)  the singular includes the plural and vice versa;

               (4)  headings are for convenience of reference only and do not
          affect interpretation;

               (5)  capitalized terms used herein for which no definition is
          provided herein shall have the meanings set forth in the Original
          Indenture, the Forward Purchase Contract Agreement, the Remarketing
          Agreement or the Pledge Agreement, as the case may be and as the
          context may require; and

               (6)  the following terms have the meanings given to them in this
          Section 1.1(6):

               "Business Day" means any day other than a Saturday, Sunday or any
other day on which banking institutions and trust companies the State of New
York or at a place of payment are authorized or required by law, regulation or
executive order to be closed.

               "Company" has the meaning set forth in the preamble.

               "Contingent Payment Regulations" has the meaning set forth in
Section 1.13.

               "Forward Purchase Contract Agent" means The Bank of New York.

               "Forward Purchase Contract Agreement" means the agreement, dated
as of June 11, 2002, between the Company and the Forward Purchase Contract
Agent.

               "Global Securities" has the meaning set forth in Section 1.5.

               "Interest Payment Date" has the meaning set forth in Section 1.3.

               "Pledge Agreement" means the Pledge Agreement, dated as of June
11, 2002, between the Company and The Bank of New York, as Forward Purchase
Contract Agent, Collateral Agent, Custodial Agent and Securities Intermediary.

               "Regular Record Date" means, with respect to each Interest
Payment Date, the close of business on the Business Day preceding such Interest
Payment Date; provided, that with respect to Separate Notes that are not in
book-entry only form, the Regular Record Date shall be the close of business on
the 15/th/ Business Day preceding such Interest Payment Date.

               "Remarketing" means any remarketing conducted pursuant to and in
accordance with the Remarketing Agreement.

               "Remarketing Agreement" means the Remarketing Agreement, dated as
of June 11, 2002, by and among the Company, the Remarketing Agent and the
Forward Purchase Contract Agent.

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          "Remarketing Value" means

               (i)  the value at the Remarketing Date or any Subsequent
          Remarketing Date, as the case may be, of either (a) U.S. Treasury
          securities that will pay, on or prior to the Payment Date falling on
          the Stock Purchase Date, an amount of cash equal to the aggregate
          interest payment that is scheduled to be payable on that Payment Date,
          on (x) the Notes which are included in Equity Units and are
          participating in the remarketing and (y) the Separate Notes which are
          to be remarketed pursuant to Section 4.5(d) of the Pledge Agreement,
          assuming for that purpose that the interest rate on the Notes is equal
          to the Coupon Rate, if the Remarketing occurs prior to the fourth
          Business Day preceding the Stock Purchase Date, or (b) an amount of
          cash equal to the aggregate interest payment that is scheduled to be
          payable on that Payment Date, on (x) the Notes which are included in
          Equity Units and are participating in the remarketing and (y) the
          Separate Notes which are to be remarketed pursuant to Section 4.5(d)
          of the Pledge Agreement and Section 1.6 of this Third Supplemental
          Indenture, assuming for that purpose that the interest rate on the
          Notes is equal to the Coupon Rate, if the Remarketing occurs on or
          after the fourth Business Day preceding the Stock Purchase Date; and

               (ii) the value at the Remarketing Date or any Subsequent
          Remarketing Date, as the case may be, of either (a) U.S. Treasury
          securities that will pay, on or prior to the Stock Purchase Date, an
          amount of cash equal to the Stated Amount of (x) such Notes which are
          included in Equity Units and are participating in the remarketing and
          (y) the Separate Notes which are to be remarketed pursuant to Section
          4.5(d) of the Pledge Agreement, if the Remarketing occurs prior to the
          fourth Business Day preceding the Stock Purchase Date, or (b) an
          amount of cash equal to the Stated Amount of (x) such Notes which are
          included in Equity Units and are participating in the remarketing and
          (y) the Separate Notes which are to be remarketed pursuant to Section
          4.5(d) of the Pledge Agreement and Section 1.6 of this Third
          Supplemental Indenture, if the Remarketing occurs on or after the
          fourth Business Day preceding the Stock Purchase Date

provided that for purposes of clauses (1) and (2) above, the Remarketing Value
shall be calculated on the assumptions that (x) the U.S. Treasury securities are
highly liquid and mature on or within 35 days prior to the Stock Purchase Date,
as determined in good faith by the Remarketing Agent in a manner intended to
minimize the cash value of the U.S. Treasury securities, and (y) the U.S.
Treasury securities are valued based on the ask-side price of the U.S. Treasury
securities at a time between 9:00 a.m. and 11:00 a.m., New York City time,
selected by the Remarketing Agent, on the Remarketing Date or any Subsequent
Remarketing Date, as the case may be, as determined on a third-day settlement
basis by reasonable and customary means selected in good faith by the
Remarketing Agent, plus accrued interest to that date.

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               "Reset Rate" means the interest rate per annum with respect to
the Senior Notes that is determined by the Remarketing Agent pursuant to the
Remarketing Agreement as follows:

               (i)  in connection with a successful Remarketing, the rate of
          interest that, in the opinion of the Remarketing Agent, will, when
          applied to the Outstanding Senior Notes, enable the then current
          aggregate market value of the Senior Notes to have a value equal to
          approximately, but not less than, 100.25% of the Remarketing Value as
          of the Remarketing Date or as of any Subsequent Remarketing Date, as
          the case may be; or

               (ii) upon the occurrence of a Failed Remarketing, the rate of
          interest applicable to the Senior Notes initially until (A) the Senior
          Notes are successfully remarketed pursuant to the Forward Purchase
          Contract Agreement and the Remarketing Agreement or (B) if the Last
          Failed Remarketing shall have occurred, a market rate of interest as
          determined in accordance with Section 1.6 of this Supplemental
          Indenture.

               "Senior Notes" has the meaning set forth in the recitals.

               "Stated Maturity" means August 16, 2007.

               "Telerate" means the Dow Jones Telerate Service.

               "Tax Event Redemption Date" has the meaning set forth in Section
1.11.

          SECTION 1.2.    Establishment, Designation and Principal Amount.

               (a)  There shall be and is hereby authorized a series of
          Securities under the Original Indenture designated the "5.75% Senior
          Notes Due August 16, 2007," in the initial aggregate principal amount
          of $300,000,000, which amount shall be as set forth in the Company
          Order for the authentication and delivery of the Senior Notes pursuant
          to Section 2.04 of the Original Indenture. Such aggregate principal
          amount of the 5.75% Senior Notes Due August 16, 2007 may be increased
          from time to time in accordance with Section 2.01 of the Original
          Indenture.

               (b)  The Senior Notes shall mature and the principal shall be due
          and payable together with all accrued and unpaid interest thereon on
          August 16, 2007.

               (c)  The Senior Notes that are part of the Equity Units shall be
          issued in definitive fully registered form (the "Registered
          Securities"), without coupons, in substantially the form set out in
          Exhibit A hereto. The entire principal amount of the Senior Notes
          shall initially be evidenced by one or more certificates issued to The
          Bank of New York, as the Forward Purchase Contract Agent under the
          Forward Purchase Contract Agreement (as defined below).

               (d)  The Senior Notes that, in accordance with the Forward
          Purchase Contract Agreement, are no longer part of Equity Units shall
          be represented initially by Global Securities (as defined below). Each
          such Registered Security and Global Security shall represent such
          aggregate principal amount of the Outstanding Senior Notes as shall be
          from time to time endorsed thereon, which principal amounts may be
          increased or

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          decreased, as applicable, to reflect Transfers from Pledged Notes to
          Separate Notes and Transfers from Separate Notes to Pledged Notes. Any
          such increase or decrease in the aggregate principal amount of (i)
          Registered Securities shall be made by the Collateral Agent and (ii)
          Global Securities representing Senior Notes shall be made by the
          Trustee, as custodian of the Global Securities, in each case upon the
          instructions of the Collateral Agent given pursuant to Article IV of
          the Pledge Agreement.

          SECTION 1.3.    Payment of Principal and Interest.

               (a)  The unpaid principal amount of the Senior Notes shall
          initially bear interest at the rate of 5.75% per annum, payable on
          each February 16, May 16, August 16 and November 16 (each, with
          respect to the Senior Notes, an "Interest Payment Date"), from the
          original date of issuance, to, but excluding, the earlier of (i) the
          settlement date of a successful Remarketing under the Forward Purchase
          Contract Agreement or (ii) the Stock Purchase Date, and, thereafter,
          at the Reset Rate to, but excluding, the Stated Maturity of the Senior
          Notes.

               (b)  Interest shall be payable quarterly in arrears on each
          Interest Payment Date to the Person in whose name the Senior Notes are
          registered on the Regular Record Date for such Interest Payment Date;
          provided that interest payable on the Stated Maturity of principal as
          provided herein shall be paid to the person to whom principal is
          payable. Any such interest not punctually paid or duly provided for
          with respect to any Interest Payment Date falling after the Stock
          Purchase Date shall forthwith cease to be payable to the registered
          holders on such regular record date, and may be paid to the person or
          persons in whose name the Senior Notes are registered at the close of
          business on a special record date to be fixed by the Trustee for the
          payment of such defaulted interest, notice whereof shall be given to
          the registered holders of the Senior Notes not less than ten (10) days
          prior to such special record date, or may be paid at any time in any
          other lawful manner not inconsistent with the requirements of any
          securities exchange, if any, on which the Senior Notes may be listed,
          and upon such notice as may be required by such exchange, all as more
          fully provided in Section 2.03 of the Original Indenture.

               (c)  The amount of interest payable for any period will be
          computed (1) for any quarterly period, on the basis of a 360-day year
          of twelve 30-day months, (2) for any period shorter than a full
          quarterly period, on the basis of a 30-day month and (3) for periods
          of less than a month, on the basis of the actual number of days
          elapsed per 30-day month. If any date on which principal or interest
          is payable is not a Business Day, then payment of principal or
          interest payable on such date will be made on the next succeeding day
          which is a Business Day (and without any interest or other payment in
          respect of any such delay), except that, if such Business Day is in
          the next succeeding calendar year, such payment shall be made on the
          immediately preceding Business Day, in each case with the same force
          and effect as if made on such date.

               (d)  Payment of the principal of and interest on the Senior Notes
          shall be made at an Office or Agency of the Company or at the Office
          of the Agent in The City of New York in such coin or currency of the
          United States of America as at the time of payment

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          is legal tender for payment of public and private debts, with any such
          payment that is due on the Stated Maturity of any Senior Notes being
          made upon surrender of such Senior Notes to the Office or Agency of
          the Company or at the Office of the Agent in The City of New York.
          Payments of interest will be made, subject to such surrender where
          applicable, at the option of the Company, (i) by check mailed to the
          address of the person entitled thereto as such address shall appear in
          the Security Register or (ii) by wire transfer at such place and to
          such account at a banking institution in the United States as may be
          designated in writing to the Trustee at least sixteen (16) days prior
          to the date for payment by the Person entitled hereto.

          SECTION 1.4.    Denominations. The Senior Notes shall be issued in
denominations of $50 and integral multiples of $50.

          SECTION 1.5.    Global Securities.

               (a)  The Senior Notes that, in accordance with the Forward
          Purchase Contract Agreement, are no longer part of the Equity Units
          will be issued initially in the form of one or more global securities
          (the "Global Securities") registered in the name of DTC or its
          nominee. Except under the limited circumstances described below or in
          Section 1.3 above, Senior Notes represented by such Global Securities
          will not be exchangeable for, and will not otherwise be issuable as,
          Senior Notes in definitive form. The Global Securities described above
          may not be transferred except by DTC to a nominee of DTC or by a
          nominee of DTC to DTC or another nominee of DTC or to a successor
          Depository or its nominee.

               (b)  Owners of beneficial interests in such a Global Security
          will not be considered the Holders thereof for any purpose under the
          Indenture, and no Global Security representing a Senior Note shall be
          exchangeable, except for another Global Security of like denomination
          and tenor to be registered in the name of DTC or its nominee or to a
          successor Depository or its nominee or except as described below. The
          rights of owners of beneficial interests in such a Global Security
          shall be exercised only through DTC.

               (c)  A Global Security shall be exchangeable for Senior Notes
          registered in the names of persons other than DTC or its nominee only
          if (i) DTC notifies the Company that it is unwilling or unable to
          continue as a Depository for such Global Security and no successor
          Depository shall have been appointed by the Company within 90 days of
          receipt by the Company of such notification, or if at any time DTC
          ceases to be a clearing agency registered under the Securities
          Exchange Act of 1934 at a time when DTC is required to be so
          registered to act as such Depository and no successor Depository shall
          have been appointed by the Company within 90 days after it becomes
          aware of such cessation, or (ii) the Company in its sole discretion
          determines that it no longer has any senior debt securities
          represented by global securities or that it will permit a Global
          Security to be exchangeable or an Event of Default under the Indenture
          has occurred and is continuing. Any Global Security that is
          exchangeable pursuant to the preceding

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          sentence shall be exchangeable for Senior Notes registered in such
          names as DTC shall direct.

          SECTION 1.6.    Remarketing.

               (a)  The Pledged Notes comprising part of Equity Units and the
          Separate Notes of holders of Separate Notes that have elected to
          participate in the Remarketing shall be remarketed by the Remarketing
          Agent on the Remarketing Date. A Holder of Equity Units may elect not
          to participate in a Remarketing and retain the Senior Notes underlying
          such Equity Units by notifying the Forward Purchase Contract Agent of
          such election and delivering the Opt-out Treasury Consideration to the
          Forward Purchase Contract Agent not later than 10:00 a.m. on the
          fourth Business Day prior to the Remarketing Date, as applicable (or,
          in the case of a Failed Remarketing, not later than 10:00 a.m. on the
          fourth Business Day immediately prior to the subsequent Remarketing
          Period). Upon receipt thereof by the Forward Purchase Contract Agent,
          the Forward Purchase Contract Agent shall deliver such Opt-out
          Treasury Consideration to the Collateral Agent, which will, for the
          benefit of the Company, thereupon apply such Opt-out Treasury
          Consideration to secure such Holder's obligations under the Forward
          Purchase Contracts. On the first Business Day immediately preceding
          the Remarketing Date (or, in the case of a Failed Remarketing, the
          subsequent Remarketing Period), the Collateral Agent, pursuant to the
          terms of the Pledge Agreement, will deliver the Pledged Notes to the
          Forward Purchase Contract Agent. Within three Business Days following
          any Remarketing Period (A) if the Remarketing was successful, the
          Forward Purchase Contract Agent shall distribute such Notes to the new
          Holders thereof and (B) if there was a Failed Remarketing, the Forward
          Purchase Contract Agent will deliver such Notes to the Collateral
          Agent, which will, for the benefit of the Company, thereupon apply
          such Notes that are a component of Equity Units to secure such
          Holders' obligations under the Forward Purchase Contracts, return any
          Opt-out Treasury Consideration delivered by such Holders to such
          Holders and return the Separate Notes to the holders thereof. A Holder
          that does not so deliver the Opt-out Treasury Consideration or has not
          settled the related Purchase Contract through a Cash Settlement or an
          Early Settlement pursuant to Sections 5.4 and 5.9 of the Forward
          Purchase Contract Agreement shall be deemed to have elected to
          participate in the Remarketing.

               (b)  On the seventh Business Day prior to the Remarketing Date or
          the first day of any subsequent Remarketing Period, the Company shall
          give Holders of Equity Units and Holders of Separate Notes notice of
          the Remarketing in an Authorized Newspaper, including the specific
          U.S. Treasury security or securities (including the CUSIP number
          and/or the principal terms of such Treasury security or securities)
          that must be delivered by Holders of Equity Units that elect not to
          participate in the Remarketing pursuant to Section 5.4(g) of the
          Forward Purchase Contract Agreement, no later than 10:00 a.m. (New
          York City time) on the seventh Business Day preceding the Remarketing
          Date. Not later than seven nor more than 15 calendar days prior to any
          Remarketing Period, the Company shall request DTC (or any successor
          Clearing Agency) to notify, directly or indirectly, each Beneficial
          Owner or Clearing Agency Participant holding Equity Units or Stripped
          Units and each Beneficial Owner of a Separate Note of

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          the Remarketing and of the procedures that must be followed in
          connection with the Remarketing.

               (c)  The Forward Purchase Contract Agent shall notify, by 10:00
          a.m., New York City time, on the third Business Date preceding the
          Remarketing Date or the first day of any subsequent Remarketing
          Period, as applicable, the Remarketing Agent and the Collateral Agent
          of the aggregate number of Senior Notes of Equity Units Holders to be
          remarketed. On the third Business Day immediately preceding the
          Remarketing Date or the first day of any subsequent Remarketing
          Period, as applicable, no later than by 10:00 a.m. New York City time,
          pursuant to the terms of the Pledge Agreement, the Custodial Agent
          will notify the Remarketing Agent of the aggregate number of Separate
          Notes to be remarketed. On the third Business Day immediately
          preceding the Remarketing Date or the first day of any subsequent
          Remarketing Period, as applicable, the Collateral Agent and the
          Custodial Agent, pursuant to the terms of the Pledge Agreement, will
          deliver for Remarketing to the Remarketing Agent all Notes to be
          remarketed. Upon receipt of such notice from the Forward Purchase
          Contract Agent and the Custodial Agent and such Notes from the
          Collateral Agent and the Custodial Agent, the Remarketing Agent will,
          on the Remarketing Date, use its commercially reasonable best efforts
          to establish a Reset Rate pursuant to clause (i) of the definition of
          Reset Rate and remarket such Senior Notes pursuant to the Remarketing
          procedures in the Remarketing Agreement.

               (d)  The right of each Holder of Senior Notes to have its Senior
          Notes tendered for purchase will be limited to the extent that (i) the
          Remarketing Agent conducts a Remarketing pursuant to the terms of the
          Remarketing Agreement, (ii) the Remarketing Agent is able to find a
          purchaser or purchasers for the tendered Senior Notes and (iii) such
          purchaser or purchasers deliver the purchase price therefor to the
          Remarketing Agent.

               (e)  Upon receipt of the notice provided above in paragraph (c)
          from the Forward Purchase Contract Agent and the Custodial Agent and
          such Notes from the Collateral Agent and the Custodial Agent, the
          Remarketing Agent will, on the Remarketing Date, use its commercially
          reasonable best efforts to (i) establish a rate of interest that, in
          the opinion of the Remarketing Agent, will, when applied to the
          outstanding Notes, enable the then current aggregate market value of
          the Notes to have a value equal to approximately, but not less than,
          100.25% of the Remarketing Value as of the Remarketing Date or as of
          any Subsequent Remarketing Date, as the case may be (the "Reset Rate")
          and (ii) sell such Notes on such date at a price equal to
          approximately, but not less than, 100.25% of the Remarketing Value.

               (f)  If, in spite of using its commercially reasonable best
          efforts, the Remarketing Agent cannot establish the Reset Rate and
          remarket the Notes included in the remarketing at a price equal to
          approximately, but not less than, 100.25% of the Remarketing Value,
          the Remarketing Agent will again attempt to establish the Reset Rate
          and remarket the Notes included in the remarketing at a price equal to
          approximately, but not less than, 100.25% of the Remarketing Value on
          each of the two immediately following Business Days. If the
          Remarketing Agent cannot remarket the Notes included in the
          remarketing at a price equal to approximately, but not less than,
          100.25% of the

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          Remarketing Value on any of those days, it will attempt to establish
          the Reset Rate and remarket the Notes included in the remarketing at a
          price equal to approximately, but not less than, 100.25% of the
          Remarketing Value on each of the three Business Days immediately
          preceding June 16, 2005. If the Remarketing Agent cannot remarket the
          Notes included in the remarketing at a price equal to approximately,
          but not less than, 100.25% of the Remarketing Value on any of those
          days, it will attempt to establish the Reset Rate and remarket the
          Notes included in the remarketing at a price equal to approximately,
          but not less than, 100.25% of the Remarketing Value on each of the
          three Business Days immediately preceding July 16, 2005. If the
          Remarketing Agent cannot establish the Reset Rate and remarket the
          Notes included in the remarketing at a price equal to approximately,
          but not less than, 100.25% of the Remarketing Value either on any of
          the two Business Days immediately following the Remarketing Date or on
          any of the three Business Days immediately preceding June 16, 2005 or
          on any of the three Business Days immediately preceding July 16, 2005,
          the remarketing in each period will be deemed to have failed (each, a
          "Failed Remarketing"). If the Remarketing Agent cannot establish the
          Reset Rate and remarket the Notes included in the remarketing at a
          price equal to approximately, but not less than, 100.25% of the
          Remarketing Value on any of the three Business Days immediately
          preceding July 16, 2005, the Remarketing Agent will further attempt to
          establish the Reset Rate and remarket the Notes included in the
          remarketing at a price equal to approximately, but not less than,
          100.25% of the Remarketing Value on each of the three Business Days
          immediately preceding August 12, 2005. If, in spite of using its
          commercially reasonable best efforts, the Remarketing Agent fails to
          remarket the Notes underlying the Equity Units at a price equal to
          approximately, but not less than, 100.25% of the Remarketing Value in
          accordance with the terms of the Pledge Agreement by 4:00 p.m., New
          York City time, on the third Business Day immediately preceding the
          Stock Purchase Date, a "Last Failed Remarketing" will be deemed to
          have occurred.

               (g)  If a successful Remarketing shall have occurred prior to the
          fourth Business Day preceding the Stock Purchase Date, the Remarketing
          Agent will, in accordance with the Forward Purchase Contract Agreement
          and the Remarketing Agreement:

                    (i)   deduct and retain for itself the Remarketing Fee;

                    (ii)  use the proceeds from such successful Remarketing to
               purchase the Agent-purchased Treasury Consideration with the
               CUSIP numbers, if any, selected by the Remarketing Agent,
               described in clauses (1) and (2) of the definition of Remarketing
               Value related to the Senior Notes of Holders of Equity Units that
               were remarketed;

                    (iii) if any Separate Notes were remarketed, remit to the
               Collateral Agent for payment to the Holders of such Separate
               Notes sold in the Remarketing the remaining proceeds from such
               successful Remarketing attributable to the Separate Notes; and

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                    (iv)  if there remain any proceeds from such successful
               Remarketing, after the application of such proceeds as set forth
               in clauses (i) through (iii) of this sentence, then remit such
               remaining proceeds to the Forward Purchase Contract Agent for
               payment to the Holders of the Equity Units that were remarketed,
               on a pro rata basis, in accordance with the Remarketing
               Agreement.

               (h)  In the case of a successful Remarketing occurring prior to
          the fourth Business Day preceding the Stock Purchase Date, on or prior
          to the third Business Day following the Remarketing Date or any
          Subsequent Remarketing Date, the Remarketing Agent shall deliver such
          Agent-purchased Treasury Consideration to the Forward Purchase
          Contract Agent, which shall thereupon deliver such Agent-purchased
          Treasury Consideration to the Collateral Agent. The Collateral Agent,
          for the benefit of the Company, will thereupon apply such
          Agent-purchased Treasury Consideration, in accordance with the Pledge
          Agreement, to secure such Holders' obligations under the Forward
          Purchase Contracts.

               (i)  If a successful Remarketing shall have occurred on or after
          the fourth Business Day preceding the Stock Purchase Date, the
          Remarketing Agent will, in accordance with the Forward Purchase
          Contract Agreement and the Remarketing Agreement:

                    (i)   deduct and retain for itself the Remarketing Fee;

                    (ii)  pay the proceeds from such successful Remarketing to
               the Forward Purchase Contract Agent, which shall thereupon
               deliver such proceeds to the Collateral Agent which, for the
               benefit of the Company, will thereupon apply such proceeds, in
               accordance with the Pledge Agreement in direct settlement of the
               Holders' obligations under the Forward Purchase Contracts;

                    (iii) if any Separate Notes were remarketed, remit to the
               Collateral Agent for payment to the Holders of such Separate
               Notes sold in the Remarketing the remaining proceeds from such
               successful Remarketing attributable to the Separate Notes; and

                    (iv)  if there remain any proceeds from such successful
               Remarketing, after the application of such proceeds as set forth
               in clauses (i) through (iii) of this sentence, then remit such
               remaining proceeds to the Forward Purchase Contract Agent for
               payment to the Holders of the Equity Units that were remarketed,
               on a pro rata basis, in accordance with the Remarketing
               Agreement.

               (j)  If a successful Remarketing occurs, by approximately 4:30
          p.m. (New York City time) on the Remarketing Date, the Remarketing
          Agent shall advise, by telephone (promptly confirmed in writing in the
          case of clause (i)):

                    (i)   the Company, the Forward Purchase Contract Agent, the
               Collateral Agent, the Securities Intermediary, DTC and the
               Trustee of the Reset Rate

                                       10

<PAGE>

               determined in the Remarketing;

                    (ii)  each purchaser (or the Depository Participant thereof)
               of Senior Notes in the Remarketing of the Reset Rate and the
               number of Senior Notes such purchaser is to purchase; and

                    (iii) each purchaser to give instructions to its Depository
               Participant to pay the purchase price on the date of settlement
               for such Remarketing in same day funds against delivery of the
               remarketed Senior Notes purchased through the facilities of DTC.

               (k)  Any distribution to Holders of excess funds and interest
          described in this Section 1.6 shall be payable at the Office of the
          Agent in The City of New York maintained for that purpose or, at the
          option of the Holder or the holder of Separate Notes, as applicable,
          by check mailed to the address of the Person entitled thereto at such
          address as it appears on the relevant Register or by wire transfer to
          an account specified by the Holder or the holder of Separate Notes, as
          applicable.

               (l)  If a Failed Remarketing occurs, the Remarketing Agent and
          the Company, as applicable, shall take the following actions:

                    (i)   the Remarketing Agent shall notify by telephone the
               Company, the Forward Purchase Contract Agent, the Collateral
               Agent and the Trustee, that a Failed Remarketing has occurred,
               whereupon the Company shall notify the Clearing Agency, by
               telephone, that a Failed Remarketing has occurred;

                    (ii)  with respect to any Remarketing Period during which no
               successful Remarketing occurred, the Company shall publish notice
               by means of Bloomberg and Reuters newswires, such notice to be
               published no later than the fourth Business Day following the end
               of such Remarketing Period;

                    (iii) the Remarketing Agent shall determine the Reset Rate
               in accordance with clause (ii) of the Reset Rate definition; and

                    (iv)  the Remarketing Agent shall remit, within three
               Business Days following the end of a Remarketing Period which
               constituted a Failed Remarketing, the Pledged Notes that were to
               be remarketed to the Collateral Agent and the Separate Notes that
               were to be remarketed to the Custodial Agent.

               (m)  If upon a Last Failed Remarketing, the Collateral Agent
          delivers any Senior Notes to the Company in full satisfaction of the
          Holder's obligation under the related Forward Purchase Contracts, any
          accumulated and unpaid interest on such Notes will become payable by
          the Company to the Forward Purchase Contract Agent for payment to the
          Holder of the Equity Units to which such Notes relate. Such payment
          will be made by the Company on or prior to 11:00 a.m., New York City
          time, on the Stock Purchase Date in lawful money of the United States
          by certified or cashier's check or wire transfer in immediately
          available funds payable to or upon the order of the Forward

                                       11

<PAGE>

          Purchase Contract Agent. Upon the occurrence of a Last Failed
          Remarketing, the Company will retain and dispose of the Pledged Notes
          of all Holders in satisfaction of the Holders' obligations under the
          related Forward Purchase Contracts. The Company will publish notice by
          means of Bloomberg and Reuters newswires of any Remarketing Period
          during which no successful Remarketing occurred, such notice to be
          published not later than the fourth Business Day following the end of
          such Remarketing Period. The Company will cause a notice of the Last
          Failed Remarketing to be published on the fourth Business Day
          following the date of the Last Failed Remarketing in an Authorized
          Newspaper.

               (n)  In the event of a Last Failed Remarketing, the Remarketing
          Agent shall determine the Reset Rate that shall apply to the Senior
          Notes held by the Holders of Equity Units that elected not to
          participate in the remarketing and Holders of Separate Notes according
          to the following method, provided that in no event shall the Reset
          Rate exceed the maximum rate permitted by state usury laws and other
          applicable laws. After the Last Failed Remarketing, the Remarketing
          Agent will take the average of the interest rates quoted to it by
          three nationally recognized investment banks selected by the Company,
          which are underwriters or dealers in debt securities similar to the
          Senior Notes, that in their judgment reflects an accurate market rate
          of interest applicable to the Senior Notes at that time. Following
          receipt of these quotes, the Remarketing Agent will have the right, in
          its sole judgment, to either recalculate the average based on only two
          of the quoted interest rates if one of the three quotes, in the
          Remarketing Agent's sole discretion, did not reflect market conditions
          or, alternatively, determine a consensus among the investment banks
          rather than a strict mathematical average by taking into account all
          relevant qualitative and quantitative factors. These factors may
          include, but shall not limited to, maturity of the Senior Notes, the
          credit rating and credit risk of the Company and companies of similar
          industries, the then yield to maturity of the Senior Notes and the
          state of the markets for primary and secondary sales of similar debt
          securities.

               (o)  In accordance with DTC's normal procedures, on the date of
          settlement of such Remarketing or the Stock Purchase Date, as
          applicable, the transactions described above with respect to each
          Senior Notes remarketed in the Remarketing shall be executed through
          DTC, and the accounts of the respective Depository Participants shall
          be debited and credited and such remarketed Senior Notes delivered by
          book entry as necessary to effect purchases and sales of such
          remarketed Senior Notes. DTC shall make payment in accordance with its
          normal procedures.

               (p)  If any Holder of Senior Notes selling Senior Notes in the
          Remarketing fails to deliver such Senior Notes, the direct or indirect
          Depository Participant of such selling Holder and of any other Person
          who was to have purchased Senior Notes in the Remarketing may deliver
          to any such other Person an aggregate principal amount of Senior Notes
          that is less than the aggregate principal amount of Senior Notes that
          otherwise was to be purchased by such Person. In such event, the
          aggregate principal amount of Senior Notes to be so delivered shall be
          determined by such direct or indirect Depository Participant, and
          delivery of such lesser aggregate principal amount of Senior Notes
          shall constitute good delivery.

                                       12

<PAGE>

               (q)  The Remarketing Agent is not obligated to purchase any
          Senior Notes that otherwise would remain unsold in the Remarketing.
          Neither the Company nor the Remarketing Agent shall be obligated in
          any case to provide funds to make payment upon tender of the Senior
          Notes for Remarketing.

               (r)  Under the Remarketing Agreement, the Company, in its
          capacity as issuer of the Senior Notes, shall be liable for, and shall
          pay, any and all costs and expenses incurred in connection with the
          Remarketing, other than the Remarketing Fee.

               (s)  The settlement procedures set forth herein, including
          provisions for payment by purchasers of the remarketed Senior Notes in
          the Remarketing, shall be subject to modification to the extent
          required by DTC or if the book-entry system is no longer available for
          the remarketed Senior Notes at the time of the Remarketing, to
          facilitate the Remarketing of the remarketed Senior Notes in
          certificated form, and shall provide for the authentication and
          delivery of Senior Notes in a principal amount equal to the
          unremarketed portion of such Senior Notes. In addition, the
          Remarketing Agent may modify the settlement procedures set forth
          herein in order to facilitate the settlement process.

          SECTION 1.7.    Optional Remarketing.

               (a)  On or prior to the fourth Business Day immediately preceding
          either the Remarketing Date or if applicable, the first day of any
          subsequent Remarketing Period, but no earlier than the Interest
          Payment Date immediately preceding the last Interest Payment Date
          before the Stock Purchase Date, holders of Separate Notes may elect to
          have their Separate Notes remarketed by Transferring their Separate
          Notes and delivering a notice of such election, substantially in the
          form of Exhibit C to the Pledge Agreement, to the Collateral Agent. On
          the third Business Day immediately prior to the Remarketing Date or
          the first day of any subsequent Remarketing Period, by 10:00 a.m., New
          York City time, the Collateral Agent shall notify the Remarketing
          Agent of the number of such Separate Notes to be remarketed. The
          Collateral Agent will hold such Separate Notes in an account separate
          from the Collateral Account. A holder of Separate Notes electing to
          have its Separate Notes remarketed will also have the right to
          withdraw such election by written notice to the Collateral Agent,
          substantially in the form of Exhibit D to the Pledge Agreement, on or
          prior to the fourth Business Day immediately preceding the applicable
          Remarketing Date or the first day of a subsequent Remarketing Period,
          upon which notice the Collateral Agent will return such Separate Notes
          to such holder.

               (b)  On the third Business Day immediately preceding the
          Remarketing Date or the first day of any subsequent Remarketing
          Period, the Collateral Agent at the written direction of the
          Remarketing Agent will deliver to the Remarketing Agent for
          Remarketing all Separate Notes delivered to the Collateral Agent
          pursuant to Section 4.5(d) of the Pledge Agreement and not withdrawn
          pursuant to the terms thereof prior to such date. If the holder of the
          Separate Notes delivers only such notice but not the Separate Notes
          subject to such notice, then none of such holder's Separate Notes
          shall be included in the Remarketing. Once the holder of Separate
          Notes elects to participate in

                                       13

<PAGE>

          the Remarketing, such Separate Notes will be remarketed in the
          Remarketing, unless such notice is properly withdrawn. In accordance
          with Section 4.5(d) of the Pledge Agreement, upon the occurrence of a
          Failed Remarketing, the Remarketing Agent will promptly return such
          Separate Notes to the Collateral Agent for redelivery to such holders
          of such Separate Notes.

          SECTION 1.8.    Sinking Fund.  The Senior Notes shall not be entitled
to any sinking fund.

          SECTION 1.9.    Redemption and Repurchase. Except as provided in
Section 1.12, the Senior Notes shall not be redeemable prior to their Stated
Maturity.

          SECTION 1.10.   Covenants.

               (a)  For so long as any Senior Notes of this series remain
          outstanding, the Company will not create or incur or allow any of its
          subsidiaries to create or incur any pledge or security interest on any
          of the capital stock of a Public Utility Subsidiary held by the
          Company or one of its subsidiaries or a Significant Subsidiary.

          For purposes of this covenant:

                    (i)   Public Utility Subsidiary means, at any particular
               time, a direct or indirect subsidiary of the Company that, as a
               substantial part of its business, distributes or transmits
               electric energy to retail or wholesale customers at rates or
               tariffs that are regulated by either a state or Federal
               regulatory authority.

                    (ii)  Significant Subsidiary means, at any particular time,
               any direct subsidiary of the Company whose consolidated gross
               assets or consolidated gross revenues (having regard to the
               Company's direct beneficial interest in the shares, or the like,
               of that subsidiary) represent at least 25% of the Company's
               consolidated gross assets or consolidated gross revenues
               appearing in the most recent audited financial statements of the
               Company as of the date of determination.

               (b)  The provisions of Article Ten of the Original Indenture
          shall be applicable to the Senior Notes.

          SECTION 1.11.   Defeasance.  The provisions of Section 11.01 of the
Original Indenture shall not apply to the Senior Notes.

          SECTION 1.12.   Tax Event Redemption.

               (a) If a Tax Event shall occur, the Company may, at its
          option, redeem the

                                       14

<PAGE>

          Senior Notes in whole (but not in part) at any time at a price per
          Senior Note equal to the Redemption Price. Installments of interest on
          the Senior Notes that are due and payable on or prior to the date of
          redemption (the "Tax Event Redemption Date") will be payable to the
          Holders of the Senior Notes registered as such on the Record Date next
          preceding such Tax Event Redemption Date. If, following the settlement
          of the Forward Purchase Contracts and following the occurrence of a
          Tax Event, the Company, at its option, redeems the Senior Notes, the
          proceeds of the redemption will be payable in cash to the Holders of
          the Senior Notes.

               (b)  If the Company exercises its option to redeem the Senior
          Notes following the occurrence of a Tax Event prior to the Remarketing
          Date, or if there has not been a successful Remarketing prior to the
          Stock Purchase Date, the Company shall in the notice to the Trustee
          pursuant to Section 3.02 of the Original Indenture specify the
          Redemption Price. Upon the specification of the Redemption Price by
          the Company, the Company shall appoint the Collateral Agent to acquire
          the Treasury Portfolio in consultation with the Company and in
          accordance with the Forward Purchase Contract Agreement. The
          Collateral Agent shall then apply, out of the aggregate Redemption
          Price for the Senior Notes that are components of Equity Units, an
          amount equal to the aggregate Redemption Amount for the Senior Notes
          that are components of Equity Units to purchase on behalf of the
          Holders of Equity Units the Treasury Portfolio and promptly remit the
          remaining portion, if any, of such aggregate Redemption Price to the
          Forward Purchase Contract Agent for payment to the Holders of such
          Equity Units. The Treasury Portfolio will be substituted for the
          Pledged Notes, and will be pledged to the Collateral Agent in
          accordance with the terms of the Pledge Agreement to secure the
          obligation of each Holder of an Equity Unit to purchase the Common
          Stock under the Forward Purchase Contract constituting a part of such
          Equity Units. Payment of the Redemption Price to Holders of Separate
          Notes shall be made in cash on the Tax Event Redemption Date.

               (c)  If a Tax Event Redemption occurs after the earlier of a
          successful Remarketing or the Stock Purchase Date, payment of the
          Redemption Price to each Holder of Senior Notes shall be made by the
          Trustee (subject to its receipt of funds), no later than 12:00 noon,
          New York City time, on the Tax Event Redemption Date, by check or wire
          transfer in immediately available funds (provided the necessary wire
          instructions have been provided to the Trustee at least 15 days prior
          to the Tax Event Redemption Date) at such place and to such account as
          may be designated by each such Holder of Senior Notes, including the
          Collateral Agent. If the Trustee holds immediately available funds
          sufficient to pay the Redemption Price of the Senior Notes, then, on
          such Tax Event Redemption Date, such Senior Notes will cease to be
          Outstanding.

               (d)  The Trustee shall have no duty or liability to determine or
          verify the Redemption Price. Notice of any redemption will be mailed
          at least 30 days but not more than 60 days before the Tax Event
          Redemption Date to each registered Holder of the Senior Notes to be
          repaid at its registered address. Unless the Company defaults in
          payment of the Redemption Price, on and after the Tax Event Redemption
          Date interest shall cease to accrue on the Senior Notes, whether or
          not such Senior Notes have been received by the Company, and all other
          rights of the Holders in respect of the Senior Notes shall terminate
          and lapse (other than the right to receive the Redemption Price

                                       15

<PAGE>

          upon delivery of such Senior Notes but without interest on such
          Redemption Price).

          SECTION 1.13.   Tax Treatment. The Company agrees, and by acceptance
of a beneficial ownership interest in the Senior Notes, each beneficial holder
of Senior Notes will be deemed to have agreed (1) to treat the acquisition of an
Equity Unit as the acquisition of the Senior Note and the Forward Purchase
Contract constituting the Equity Unit and to allocate the purchase price of the
Equity Unit between the Senior Note and the Forward Purchase Contract as $50 and
$0, respectively, (2) to treat the Senior Notes as indebtedness that is subject
to Treas. Reg. Sec. 1.1275-4 (the "Contingent Payment Regulations") for United
States federal income tax purposes and (3) to be bound by the Company's
determination of the "comparable yield" and "projected payment schedule," within
the meaning of the Contingent Payment Regulations, with respect to the Senior
Notes for United States federal income tax purposes. A Holder of Senior Notes
may obtain the amount of original issue discount, issue date, yield to maturity,
comparable yield and projected payment schedule by submitting a written request
for it to the Company at the following address: American Electric Power,
Investor Relations, One Riverside Plaza, Columbus, Ohio 43215.

                                   ARTICLE TWO

                            MISCELLANEOUS PROVISIONS

          SECTION 2.1.    Recitals by Company. The recitals in this Third
Supplemental Indenture are made by the Company only and not by the Trustee, and
all of the provisions contained in the Original Indenture in respect of the
rights, privileges, immunities, powers and duties of the Trustee shall be
applicable in respect of the Senior Notes and of this Third Supplemental
Indenture as fully and with like effect as if set forth herein in full.

          SECTION 2.2.    Ratification and Incorporation of Original Indenture.
As supplemented hereby, the Original Indenture is in all respects ratified and
confirmed, and the Original Indenture and this Third Supplemental Indenture
shall be read, taken and construed as one and the same instrument.

          SECTION 2.3.    Executed in Counterparts. This Third Supplemental
Indenture may be executed in several counterparts, each of which shall be deemed
to be an original, and such counterparts shall together constitute but one and
the same instrument.

          SECTION 2.4.    Separability. In case any provisions contained in this
Third Supplemental Indenture or in any Senior Note shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

          SECTION 2.5.    Governing Law. THIS THIRD SUPPLEMENTAL INDENTURE

                                       16

<PAGE>

AND EACH SENIOR NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE OR INSTRUMENTS
ENTERED INTO AND, IN EACH CASE, PERFORMED IN SAID STATE.

                                       17

<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Third
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed, all as of the day and year first above written.

                                             AMERICAN ELECTRIC POWER COMPANY,
                                             INC.

                                             By:________________________________
                                                Name:
                                                Title:

                                       18

<PAGE>

                                               THE BANK OF NEW YORK, as Trustee

                                               By:______________________________
                                                  Name:
                                                  Title:

                                       19

<PAGE>

                                    EXHIBIT A

                               FORM OF SENIOR NOTE

                                 [Face of Note]

[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL
SECURITIES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY OR ANY SUCCESSOR DEPOSITARY
APPOINTED AS SUCH PURSUANT TO THE INDENTURE (THE "DEPOSITARY") TO A NOMINEE OF
THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO SUCH A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
GLOBAL SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OR TRANSFER, EXCHANGE OR PAYMENT,
AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF THE DEPOSITARY OR ITS
NOMINEE OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY AND ANY PAYMENT IS MADE TO THE DEPOSITARY OR ITS NOMINEE, ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF HAS AN INTEREST HEREIN.]*

CUSIP No.
ISIN No.
No. ___                                                         $_______________

                      AMERICAN ELECTRIC POWER COMPANY, INC.

                     5.75% Senior Notes Due August 16, 2007

               American Electric Power Company, Inc., a corporation duly
organized and existing under the laws of New York (the "Company," which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to [Cede & Co.]* or registered
assigns, the principal sum of _______________________ United States Dollars [,
or such other principal amount as shall be set forth in the Schedule of
Increases or Decreases attached hereto,]** at the Company's Office or Agency or
Office of the Agent in The City of New York for said purpose, on August 16, 2007
in such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts, and
to pay interest thereon from June 11, 2002 or from the next most recent date to
which interest has been paid or duly provided for, quarterly in arrears on each
February 16, May 16, August 16 and November 16 of each year (each such date, an
"Interest

------------------
*      Insert in Global Securities.
**     Insert in Global Securities and Pledged Notes.

                                      A-1

<PAGE>

Payment Date"), commencing on August 16, 2002, at the rate of 5.75% per annum
to, but excluding, the earlier of (i) the settlement date of a successful
Remarketing under the Forward Purchase Contract Agreement or (ii) the Stock
Purchase Date, and, thereafter, at the Reset Rate to, but excluding, the Stated
Maturity.

               The amount of interest so payable for any period shall be
computed (i) for any full quarterly period on the basis of a 360-day year of
twelve 30-day months and (ii) for any period shorter than a full quarterly
period, on the basis of a 30-day month and, for periods of less than a month, on
the basis of the actual number of days elapsed per 30-day month. In the event
that any Interest Payment Date is not a Business Day, then payment of the
interest or principal payable on such date will be made on the next succeeding
day which is a Business Day and no interest shall accrue in respect of the
amounts which payment is so delayed for the period from and after such interest
payment date or other payment date, except that, if such Business Day is in the
next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.

               Payments of the principal of and interest on the Senior Notes
shall be made at said Office or Agency of the Company or at the Office of the
Agent in The City of New York to which interest on the Senior Notes has been
paid or duly provided for, until payment of said principal sum has been made or
duly provided for; provided that, unless this Senior Note is a Senior Note
issued in global form ("Global Security"), interest may be paid, at the option
of the Company, (i) by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register or (ii) by wire
transfer at such place and to such account at a banking institution in the
United States as may be designated in writing to the Trustee at least sixteen
(16) days prior to the date for payment by the Person entitled thereto. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date, as provided in the Indenture, as hereinafter defined, shall be
paid to the Person in whose name this Note (or one or more Predecessor
Securities) shall have been registered at the close of business on the Regular
Record Date with respect to such Interest Payment Date, provided that interest
payable on the Stated Maturity or any redemption date shall be paid to the
Person to whom principal is paid. Any such interest not so punctually paid or
duly provided for shall forthwith cease to be payable to the Holder on such
Regular Record Date and shall be paid as provided in said Indenture.

               Reference is hereby made to the further provisions of this Senior
Note set forth herein, which further provisions shall for all purposes have the
same effect as if set forth at this place.

               Unless the certificate of authentication hereon has been executed
by the Trustee referred to herein by manual signature, this Senior Note shall
not be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.

                                      A-2

<PAGE>

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

Dated: ___________________

                                      AMERICAN ELECTRIC POWER COMPANY, INC.

                                      By:   _________________________________
                                            Name
                                            Title:

                                      A-3

<PAGE>

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

Dated: ___________________

                                        THE BANK OF NEW YORK, as Trustee

                                        By:  ___________________________
                                                 Authorized Signatory

                                      A-4

<PAGE>

                                [Reverse of Note]

                      American Electric Power Company, Inc.

                     5.75% Senior Notes Due August 16, 2007

               This Senior Note is one of a duly authorized issue of securities
of the Company (the "Securities"), issued and to be issued in one or more series
under an Indenture, dated as of May 1, 2001 (the "Original Indenture"), as
previously supplemented and as to be supplemented by a third supplemental
indenture, dated as of June 11, 2002 (the "Third Supplemental Indenture" and the
Original Indenture, as so supplemented, the "Indenture"), between the Company
and The Bank of New York, a New York banking corporation, as trustee (the
"Trustee," which term includes any successor trustee under the Indenture), and
reference is hereby made to the Indenture for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Senior Note is one of a series
designated as 5.75% Senior Notes Due August 16, 2007 of the Company (hereinafter
called the "Senior Notes"), issued under the Original Indenture, which is
limited in aggregate principal amount to $300,000,000.

               Neither the Original Indenture nor the Senior Notes limit or
otherwise restrict the amount of indebtedness which may be incurred or other
securities which may be issued by the Company. The Senior Notes issued under the
Indenture are direct, unsecured obligations of the Company and will mature on
August 16, 2007. The Senior Notes rank on parity with all other unsecured,
unsubordinated indebtedness of the Company.

               The Senior Notes will bear interest as set forth on the face
hereof and in the Third Supplemental Indenture. The Reset Rate will be the
interest rate per annum that is determined by the Remarketing Agent pursuant to
the Remarketing Agreement as follows: (i) in connection with a successful
Remarketing, the rate of interest that will, when applied to the Outstanding
Notes, enable the then current aggregate market value of the Notes to have a
value equal to approximately, but not less than, 100.25% of the Remarketing
Value as of the Remarketing Date or as of any Subsequent Remarketing Date, as
the case may be, or (ii) upon the occurrence of a Failed Remarketing the rate of
interest applicable to the Senior Notes initially until (A) the Senior Notes are
successfully remarketed pursuant to the Forward Purchase Contract Agreement and
the Remarketing Agreement or (B) if the Last Failed Remarketing shall have
occurred, in accordance with the method as described below.

               Notwithstanding anything herein to the contrary, the Reset Rate
shall in no event exceed the maximum rate, if any, permitted by applicable law.

               In the event of a Last Failed Remarketing, the Remarketing Agent
shall determine the Reset Rate that shall apply to the Senior Notes held by the
Holders of Equity Units that elected not to participate in the remarketing and
Holders of Separate Notes according to the following method. After the Last
Failed Remarketing, the Remarketing Agent will take the average of the interest
rates quoted to it by three nationally recognized investment banks selected

                                      A-5

<PAGE>

by the Company, which are underwriters or dealers in debt securities similar to
the Senior Notes, that in their judgment reflects an accurate market rate of
interest applicable to the Senior Notes at that time. Following receipt of these
quotes, the Remarketing Agent will have the right, in its sole judgment, to
either recalculate the average based on only two of the quoted interest rates if
one of the three quotes, in the Remarketing Agent's sole discretion, did not
reflect market conditions or, alternatively, determine a consensus among the
investment banks rather than a strict mathematical average by taking into
account all relevant qualitative and quantitative factors. These factors may
include, but shall not limited to, maturity of the Senior Notes, the credit
rating and credit risk of the Company and companies of similar industries, the
then yield to maturity of the Senior Notes and the state of the markets for
primary and secondary sales of similar debt securities.

               The Senior Notes are not redeemable prior to maturity except
pursuant to a Tax Event in accordance with the Third Supplemental Indenture. If
a Tax Event shall occur, the Company may, at its option, redeem the Senior Notes
in whole (but not in part) at any time at a price per Senior Note equal to the
Redemption Price. Installments of interest on the Senior Notes that are due and
payable on or prior to the date of redemption will be payable to the Holders of
the Senior Notes registered as such at the close of business on the Record Date
next preceding such Tax Event Redemption Date. If, following the settlement of
the Forward Purchase Contracts and following the occurrence of a Tax Event, the
Company, at its option, redeems the Senior Notes, the proceeds of the redemption
will be payable in cash to the Holders of the Senior Notes.

               The Company agrees, and by acceptance of a beneficial ownership
interest in the Senior Notes, each beneficial holder of Senior Notes will be
deemed to have agreed (1) for United States federal, state and local income and
franchise tax purposes to treat the acquisition of an Equity Unit as the
acquisition of the Senior Note and the Forward Purchase Contract constituting
the Equity Unit, (2) to treat the Senior Notes as indebtedness that is subject
to Treas. Reg. Sec. 1.1275-4 (the "Contingent Payment Regulations") for United
States federal income tax purposes and (3) to be bound by the Company's
determination of the "comparable yield" and "projected payment schedule," within
the meaning of the Contingent Payment Regulations, with respect to the Senior
Notes for United States federal income tax purposes. A Holder of Senior Notes
may obtain the amount of original issue discount, issue date, yield to maturity,
comparable yield and projected payment schedule by submitting a written request
for it to the Company at the following address: American Electric Power,
Investor Relations, One Riverside Plaza, Columbus, Ohio 43215.

               The Senior Notes are not entitled to any sinking fund.

               The Senior Notes that are a component of Equity Units or that so
elect under Section 1.7 of the Indenture will be subject to Remarketing and, in
the case of a Failed Remarketing, the Collateral Agent for the benefit of the
Company reserves all of its rights as a secured party of the Pledged Notes with
respect thereto and, subject to applicable law and Section 5.4 of the Forward
Purchase Contract Agreement, may, among other things, permit the Company to
cause the Senior Notes to be sold or to retain and cancel such Senior Notes, in
either case, in full satisfaction of the Holders' obligations under the Forward
Purchase Contracts.

                                      A-6

<PAGE>

               If an Event of Default with respect to the Senior Notes shall
occur and be continuing, the principal of the Senior Notes may be declared due
and payable in the manner and with the effect provided in the Indenture. The
Senior Indenture provides that in certain circumstances such declaration and its
consequences may be waived by the Holders of a majority in aggregate principal
amount of the Senior Notes then Outstanding. However, any such consent or waiver
by the Holder shall not affect any subsequent default or impair any right
consequent thereon.

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

Restrictive Covenants

          Limitation upon Liens of Certain Subsidiaries

          For so long as any Senior Notes of this series remain outstanding, the
Company will not create or incur or allow any of its subsidiaries to create or
incur any pledge or security interest on any of the capital stock of a Public
Utility Subsidiary held by the Company or one of its subsidiaries or a
Significant Subsidiary.

                                      A-7

<PAGE>

          For purposes of this covenant:

               (i)  Public Utility Subsidiary means, at any particular time, a
          direct or indirect subsidiary of the Company that, as a substantial
          part of its business, distributes or transmits electric energy to
          retail or wholesale customers at rates or tariffs that are regulated
          by either a state or Federal regulatory authority.

               (ii) Significant Subsidiary means, at any particular time, any
direct subsidiary of ours whose consolidated gross assets or consolidated gross
revenues (having regard to the Company's direct beneficial interest in the
shares, or the like, of that subsidiary) represent at least 25% of the Company's
consolidated gross assets or consolidated gross revenues appearing in the most
recent audited financial statements of the Company as of the date of
determination.

          Limitation upon Mergers, Consolidations and Sale of Assets

          The provisions of Article Ten of the Indenture shall be applicable to
the Senior Notes of this series.

          The Indenture contains provisions for defeasance of (a) the entire
indebtedness evidenced by this Senior Note and (b) certain restrictive covenants
upon compliance by the Company with certain conditions set forth therein;
provided, however, Section 11.01 of the Original Indenture shall not apply to
the Senior Notes.

          No reference herein to the Indenture and no provision of this Senior
Note or of the Indenture shall alter or impair the obligation of the Company,
which are absolute and unconditional, to pay the principal of (and premium, if
any) and interest, if any, on this Senior Note at the times, places and rates,
and in the coin or currency, herein prescribed.

          The Senior Notes of this series are issuable only in registered form
without coupons in minimum denominations of $50 or any integral multiple of $50
over such minimum denomination. At the Office or Agency of the Company or at the
Office of the Agent in The City of New York referred to on the face hereof and
as provided in the Indenture and subject to certain limitations therein set
forth, the Senior Notes are exchangeable for a like aggregate principal amount
of Senior Notes and of like tenor of a difference authorized denomination, as
requested by the Holder surrendering the same.

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

                                      A-8

<PAGE>

               Prior to due presentment of this Senior Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Senior Note is registered as the owner
hereof for all purposes, whether or not this Senior Note be overdue and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.

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

               THIS SENIOR NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE
LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF SAID STATE.

               All terms used in this Senior Note (and not otherwise defined in
this Senior Note) that are defined in the Indenture, the Forward Purchase
Contract Agreement, the Remarketing Agreement or the Pledge Agreement, as the
case may be, shall have the meanings assigned to them in the Indenture, the
Forward Purchase Contract Agreement, the Remarketing Agreement or the Pledge
Agreement, as the case may be and as the context may require.

                                      A-9

<PAGE>

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

_____________________________________________________________________________.
     (please insert Social Security or other identifying number of assignee)

_____________________________________________________________________________.

_____________________________________________________________________________.

_____________________________________________________________________________.

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF
ASSIGNEE

the within Senior Note and all rights thereunder, hereby irrevocably
constituting and appointing

_____________________________________________________________________________.

_____________________________________________________________________________.

_____________________________________________________________________________.

_____________________________________________________________________________.

_____________________________________________________________________________.

_____________________________________________________________________________.

agent to transfer said Senior Note on the books of the Company, with full power
of substitution in the premises.

Dated:_______________ __, ______

                                                    ____________________________

NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular without
alteration or enlargement, or any change whatever.

<PAGE>

            [TO BE ATTACHED TO GLOBAL CERTIFICATES AND PLEDGED NOTES]

                       SCHEDULE OF INCREASES OR DECREASES

                  The following increases or decreases in this [Global
Certificate] [Pledged Note] have been made:

<TABLE>
<CAPTION>
________________________________________________________________________________________________________________________

========================================================================================================================
                                                                          Principal amount of
                           Amount of decrease    Amount of increase in       Senior Notes
                           in principal amount    principal amount of      evidenced by the
                             of Senior Notes          Senior Notes       [Global Certificate]       Signature of
                            evidenced by the        evidenced by the        [Pledged Note]      authorized signatory
                          [Global Certificate]    [Global Certificate]      following such          of Trustee or
          Date               [Pledged Note]          [Pledged Note]      decrease or increase     Collateral Agent
========================================================================================================================
<S>                       <C>                    <C>                     <C>                    <C>
________________________________________________________________________________________________________________________

________________________________________________________________________________________________________________________

________________________________________________________________________________________________________________________

________________________________________________________________________________________________________________________

________________________________________________________________________________________________________________________

________________________________________________________________________________________________________________________

________________________________________________________________________________________________________________________

________________________________________________________________________________________________________________________

________________________________________________________________________________________________________________________

________________________________________________________________________________________________________________________

________________________________________________________________________________________________________________________

________________________________________________________________________________________________________________________

________________________________________________________________________________________________________________________

________________________________________________________________________________________________________________________

________________________________________________________________________________________________________________________

________________________________________________________________________________________________________________________

________________________________________________________________________________________________________________________

________________________________________________________________________________________________________________________

________________________________________________________________________________________________________________________

________________________________________________________________________________________________________________________

________________________________________________________________________________________________________________________

________________________________________________________________________________________________________________________

________________________________________________________________________________________________________________________

========================================================================================================================
</TABLE><PAGE>

                                                                     Exhibit 4.3

                     AMERICAN ELECTRIC POWER COMPANY, INC.,

                              THE BANK OF NEW YORK,

                      as Collateral Agent, Custodial Agent

                           and Securities Intermediary

                                       AND

                              THE BANK OF NEW YORK

                       as Forward Purchase Contract Agent

                                PLEDGE AGREEMENT

                            Dated as of June 11, 2002

<PAGE>

                                TABLE OF CONTENTS

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

     SECTION 1.1       Definitions......................................................   2

                                   ARTICLE II
                         PLEDGE; CONTROL AND PERFECTION

     SECTION 2.1       The Pledge.......................................................   4
     SECTION 2.2       Control and Perfection...........................................   6

                                   ARTICLE III
                         PAYMENTS ON PLEDGED COLLATERAL

     SECTION 3.1       Payments.........................................................   8
     SECTION 3.2       Application of Payments..........................................   9

                                        ARTICLE IV
             SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF NOTES

     SECTION 4.1       Collateral Substitution and the Creation of Stripped Units.......   9
     SECTION 4.2       Collateral Substitution and the Re-Creation of Equity Units......  10
     SECTION 4.3       Termination Event................................................  11
     SECTION 4.4       Early Settlement; Merger Early Settlement; Cash Settlement. .....  11
     SECTION 4.5       Remarketing; Application of Proceeds; Settlement.................  12

                                    ARTICLE V
                              VOTING RIGHTS-- NOTES

     SECTION 5.1       Exercise by Forward Purchase Contract Agent......................  15

                                   ARTICLE VI
                    RIGHTS AND REMEDIES; TAX EVENT REDEMPTION

     SECTION 6.1       Rights and Remedies of the Collateral Agent......................  15
     SECTION 6.2       Substitutions....................................................  16
     SECTION 6.3       Tax Event Redemption.............................................  17

                                   ARTICLE VII
                    REPRESENTATIONS AND WARRANTIES; COVENANTS

     SECTION 7.1       Representations and Warranties...................................  17
     SECTION 7.2       Covenants........................................................  18
</TABLE>

                                       -i-

<PAGE>

<TABLE>
<CAPTION>
                                  ARTICLE VIII
                              THE COLLATERAL AGENT
     <S>                                                                                  <C>
     SECTION 8.1       Appointment, Powers and Immunities...............................  18
     SECTION 8.2       Instructions of the Company......................................  20
     SECTION 8.3       Reliance.........................................................  20
     SECTION 8.4       Rights in Other Capacities.......................................  21
     SECTION 8.5       Non-Reliance on Collateral Agent.................................  21
     SECTION 8.6       Compensation and Indemnity.......................................  21
     SECTION 8.7       Failure to Act...................................................  22
     SECTION 8.8       Resignation......................................................  23
     SECTION 8.9       Right to Appoint Agent or Advisor................................  24
     SECTION 8.10      Survival.........................................................  24
     SECTION 8.11      Exculpation......................................................  24

                                   ARTICLE IX
                                    AMENDMENT

     SECTION 9.1       Amendment Without Consent of Holders.............................  25
     SECTION 9.2       Amendment with Consent of Holders................................  25
     SECTION 9.3       Execution of Amendments..........................................  26
     SECTION 9.4       Effect of Amendments.............................................  26
     SECTION 9.5       Reference to Amendments..........................................  26

                                    ARTICLE X
                                  MISCELLANEOUS

     SECTION 10.1      No Waiver........................................................  27
     SECTION 10.2      GOVERNING LAW....................................................  27
     SECTION 10.3      Notices..........................................................  27
     SECTION 10.4      Successors and Assigns...........................................  28
     SECTION 10.5      Counterparts.....................................................  28
     SECTION 10.6      Severability.....................................................  28
     SECTION 10.7      Expenses, Etc....................................................  28
     SECTION 10.8      Security Interest Absolute.......................................  29
     SECTION 10.9      Waiver of Jury Trial.............................................  29

     EXHIBIT A         Instruction from Forward Purchase Contract Agent to Collateral Agent
     EXHIBIT B         Instruction to Forward Purchase Contract Agent
     EXHIBIT C         Instruction to Custodial Agent Regarding Remarketing
     EXHIBIT D         Instruction to Custodial Agent Regarding Withdrawal from Remarketing
</TABLE>

                                      -ii-

<PAGE>

                                PLEDGE AGREEMENT

                  PLEDGE AGREEMENT, dated as of June 11, 2002 (this
         "Agreement"), among American Electric Power Company, Inc., a New York
         corporation (the "Company"), The Bank of New York, a New York banking
         corporation, not individually but solely as collateral agent (in such
         capacity, together with its successors in such capacity, the
         "Collateral Agent"), as custodial agent (in such capacity, together
         with its successors in such capacity, the "Custodial Agent") and as
         "securities intermediary" as defined in Section 8-102(a)(14) of the
         Code (as defined herein) (in such capacity, together with its
         successors in such capacity, the "Securities Intermediary"), and The
         Bank of New York, not individually but solely as forward purchase
         contract agent and as attorney-in-fact of the Holders from time to time
         of the Equity Units and Stripped Units (in such capacity, together with
         its successors in such capacity, the "Forward Purchase Contract Agent")
         under the Forward Purchase Contract Agreement (as defined herein).

                                    RECITALS

                  WHEREAS, the Company and the Forward Purchase Contract Agent
         are parties to the Forward Purchase Contract Agreement, dated as of the
         date hereof (as modified and supplemented and in effect from time to
         time, the "Forward Purchase Contract Agreement"), pursuant to which
         there may be issued 6,000,000 Equity Units of the Company (or 6,900,000
         Equity Units if the Underwriters exercise their over-allotment option
         in full) each having a Stated Amount of $50 per Unit, all of which will
         initially be Equity Units.

                  WHEREAS, each Equity Unit will be comprised of (a) a Forward
         Purchase Contract and (b) either beneficial ownership of (i) a Note,
         (ii) following the successful remarketing of the Notes in accordance
         with the Forward Purchase Contract Agreement and the Remarketing
         Agreement, the appropriate Treasury Consideration or (iii) following a
         Tax Event Redemption in accordance with the Forward Purchase Contract
         Agreement, an Applicable Ownership Interest in the Treasury Portfolio.

                  WHEREAS, in accordance with the terms of the Forward Purchase
         Contract Agreement, a Holder of Equity Units may separate the Notes
         from the related Forward Purchase Contracts by substituting for such
         Notes Treasury Securities that will pay in the aggregate an amount
         equal to the amount due on the Stock Purchase Date under such Forward
         Purchase Contracts. Upon such separation, the Equity Units will become
         Stripped Units. Each Stripped Unit will be comprised of (a) a Forward
         Purchase Contract and (b) a 1/20 undivided beneficial interest in a
         Treasury Security.

                  WHEREAS, pursuant to the terms of the Forward Purchase
         Contract Agreement and the Forward Purchase Contracts, the Holders,
         from time to time, of the Equity Units and Stripped Units have
         irrevocably authorized the Forward 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
         plIedge provided hereby of the Notes, any Treasury Consideration, any
         Treasury Securities and any Applicable

<PAGE>

         Ownership Interest in the Treasury Portfolio delivered in exchange
         therefor to secure each Holder's obligations under the related Forward
         Purchase Contracts, as provided herein and subject to the terms hereof.

                  NOW, THEREFORE, the Company, the Collateral Agent, the
         Securities Intermediary, the Custodial Agent and the Forward Purchase
         Contract Agent, on its own behalf and as attorney-in-fact of the
         Holders from time to time of the Equity Units and Stripped Units, agree
         as follows:

                                    ARTICLE I

                                   DEFINITIONS

          SECTION 1.1   Definitions.

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

                  (a) capitalized terms used but not defined herein are used as
         defined in the Forward Purchase Contract Agreement;

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

                  (c) 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 or other subdivision.

                  "Agreement" means this instrument as originally executed or as
         it may from time to time be supplemented or amended by one or more
         agreements supplemental hereto entered into pursuant to the applicable
         provisions hereof.

                  "Code" has the meaning specified in Section 6.1(a) hereof.

                  "Collateral" has the meaning specified in Section 2.1(a)
         hereof.

                  "Collateral Account" means the securities account (number
         _________) maintained at ______________________ in the name "The Bank
         of New York, a New York banking corporation, as Forward Purchase
         Contract Agent on behalf of the holders of certain securities of
         American Electric Power Company, Inc., Collateral Account subject to
         the American Electric Power Company, Inc., as pledgee" and any
         successor account.

                  "Collateral Agent" has the meaning specified in the first
         paragraph of this Agreement.

                  "Company" means the Person named as the "Company" in the first
         paragraph of this Agreement until a successor shall have become such
         pursuant to the applicable

                                       2

<PAGE>

         provisions of the Forward Purchase Contract Agreement, and thereafter
         "Company" shall mean such successor.

                  "Custodial Agent" has the meaning specified in the first
         paragraph of this Agreement.

                  "Forward Purchase Contract Agent" has the meaning specified in
         the first paragraph of this Agreement.

                  "Forward Purchase Contract Agreement" has the meaning
         specified in the Recitals.

                  "Intermediary" means any entity that in the ordinary course of
         its business maintains securities accounts for others and is acting in
         that capacity.

                  "Pledge" has the meaning specified in Section 2.1(c) hereof.

                  "Pledged Applicable Ownership Interest in the Treasury
         Portfolio" has the meaning specified in Section 2.1(c) hereof.

                  "Pledged Notes" has the meaning specified in Section 2.1(c)
         hereof.

                  "Pledged Treasury Consideration" has the meaning specified in
         Section 2.1(c) hereof.

                  "Pledged Treasury Securities" has the meaning specified in
         Section 2.1(c) hereof.

                  "Proceeds" means all interest, dividends, cash, instruments,
         securities, financial assets (as defined in Section 8-102(a)(9) of the
         Code) and other property from time to time received, receivable or
         otherwise distributed upon the sale, exchange, collection or
         disposition of the Collateral or any proceeds thereof.

                  "Securities Intermediary" has the meaning specified in the
         first paragraph of this Agreement.

                  "Security Entitlement" has the meaning specified in Section
         8-102(a)(17) of the Code.

                  "Separate Notes" means any Notes that are not Pledged Notes.

                  "Supplemental Indenture" means that third supplemental
         indenture dated as of June 11, 2002, between the Company and The Bank
         of New York, as trustee (the "Trustee"), to the indenture dated as of
         May 1, 2001, between the Company and the Trustee.

                  "Tax Event Redemption Date" means the date upon which a Tax
         Event Redemption is to occur.

                                       3

<PAGE>

                  "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, with respect to the Collateral and in
         accordance with the instructions of the Collateral Agent, the Forward
         Purchase Contract Agent or the Holder, as applicable:

                           (i) in the case of Collateral consisting of
                  securities which cannot be delivered by book-entry or which
                  the parties agree are to be delivered in physical form,
                  delivery in appropriate physical form to the recipient
                  accompanied by any duly executed instruments of transfer,
                  assignments in blank, transfer tax stamps and any other
                  documents necessary to constitute a legally valid transfer to
                  the recipient;

                           (ii) in the case of Collateral consisting of
                  securities maintained in book-entry form, delivery by causing
                  a "securities intermediary" (as defined in Section
                  8-102(a)(14) of the Code) to (a) credit a "security
                  entitlement" (as defined in Section 8-102(a)(17) of the Code)
                  with respect to such securities to a "securities account" (as
                  defined in Section 8-501(a) of the Code) maintained by or on
                  behalf of the recipient and (b) to issue a confirmation to the
                  recipient with respect to such credit. In the case of
                  Collateral to be delivered to the Collateral Agent, the
                  securities intermediary shall be the Securities Intermediary
                  and the securities account shall be the Collateral Account. In
                  addition, any Transfer of Treasury Securities and Treasury
                  Consideration hereunder shall be made in accordance with the
                  TRADES Regulations and other applicable law.

                                   ARTICLE II

                         PLEDGE; CONTROL AND PERFECTION

         SECTION 2.1  The Pledge.

                  (a) The Holders from time to time acting through the Forward
         Purchase Contract Agent, as their attorney-in-fact, and the Forward
         Purchase Contract Agent, as such attorney-in-fact, hereby pledge and
         grant to the Collateral Agent, for the benefit of the Company, as
         collateral security for the performance when due by such Holders of
         their respective obligations under the related Forward Purchase
         Contracts, a security interest in all of the right, title and interest
         of the Forward Purchase Contract Agent and such Holders in:

                           (i) (A) the Notes, Treasury Consideration, Treasury
                  Securities and any Applicable Ownership Interest in the
                  Treasury Portfolio constituting a part of the Equity Units or
                  Stripped Units, (B) any Treasury Securities delivered in
                  exchange for any Notes in accordance with Section 4.1 hereof,
                  and (C) any Notes delivered

                                       4

<PAGE>

                  in exchange for any Treasury Securities in accordance with
                  Section 4.2 hereof, in each case that have been Transferred to
                  or otherwise received by the Collateral Agent and not released
                  by the Collateral Agent to such Holders under the provisions
                  of this Agreement;

                           (ii) the Collateral Account and all securities,
                  financial assets, security entitlements, cash and other
                  property credited thereto and all Security Entitlements
                  related thereto; and

                           (iii) all Proceeds of the foregoing (all of the
                  foregoing, collectively, the "Collateral").

                  (b) Prior to or concurrently with the execution and delivery
         of this Agreement, the Forward Purchase Contract Agent, on behalf of
         the initial Holders of the Equity Units, shall cause the Notes
         comprising a part of the Equity Units to be Transferred to the
         Collateral Agent for the benefit of the Company.

                  (c) The pledge provided in this Section 2.1 is herein referred
         to as the "Pledge" and the Notes (or the Notes that are delivered
         pursuant to Section 4.2 hereof), Treasury Consideration, Treasury
         Securities or Applicable Ownership Interest in the Treasury Portfolio
         subject to the Pledge, excluding any Notes or Treasury Securities
         released from the Pledge as provided in Sections 4.1, 4.2 and 4.3
         hereof, respectively, are herein referred to as "Pledged Notes,"
         "Pledged Treasury Consideration," "Pledged Treasury Securities" or
         "Pledged Applicable Ownership Interest in the Treasury Portfolio,"
         respectively. Subject to the Pledge and Section 2.2 hereof, the Holders
         from time to time shall have full beneficial ownership of the
         Collateral. For purposes of perfecting the Pledge under applicable law,
         including, to the extent applicable, the TRADES Regulations or the
         Uniform Commercial Code as adopted and in effect in any applicable
         jurisdiction, the Collateral Agent shall be the agent of the Company as
         provided herein. Whenever directed by the Collateral Agent acting on
         behalf of the Company, the Securities Intermediary shall have the right
         to reregister in its name the Notes or any other securities held in
         physical form.

                  (d) Except as may be required in order to release Notes in
         connection with a Tax Event Redemption or with a Holder's election to
         convert Equity Units to Stripped Units, or except as otherwise required
         to release Notes as specified herein, neither the Collateral Agent, the
         Custodial Agent nor the Securities Intermediary shall relinquish
         physical possession of any certificate evidencing a Note prior to the
         termination of this Agreement. If it becomes necessary for the
         Securities Intermediary to relinquish physical possession of a
         certificate in order to release a portion of the Notes evidenced
         thereby from the Pledge, the Company or the Forward Purchase Contract
         Agent shall use its commercially reasonable best efforts to arrange for
         the Securities Intermediary to obtain physical possession of a
         replacement certificate evidencing any Notes remaining subject to the
         Pledge hereunder registered to the Securities Intermediary or endorsed
         in blank within fifteen days of the date the Securities Intermediary
         relinquished possession. The Securities Intermediary shall promptly
         notify the Company and the Collateral Agent of

                                       5

<PAGE>

         the Securities Intermediary's failure to obtain possession of any such
         replacement certificate as required hereby.

         SECTION 2.2  Control and Perfection.

                  (a) In connection with the Pledge granted in Section 2.1, and
         subject to the other provisions of this Agreement, the Holders from
         time to time acting through the Forward Purchase Contract Agent, as
         their attorney-in-fact, hereby authorize and direct the Securities
         Intermediary (without the necessity of obtaining the further consent of
         the Forward Purchase Contract Agent or any of the Holders), and the
         Securities Intermediary agrees, to comply with and follow any
         instructions and entitlement orders (as defined in Section 8-102(a)(8)
         of the Code) that the Collateral Agent may deliver with respect to the
         Collateral Account, the Collateral credited thereto and any Security
         Entitlements with respect thereto. In the event the Securities
         Intermediary receives from the Holders or the Forward Purchase Contract
         Agent entitlement orders which conflict with entitlement orders
         received from the Collateral Agent, the Securities Intermediary shall
         follow the entitlement orders received from the Collateral Agent. Such
         instructions and entitlement orders may, without limitation, direct the
         Securities Intermediary to transfer, redeem, assign, or otherwise
         deliver the Notes, the Treasury Consideration, the Treasury Securities,
         any Applicable Ownership Interest in the Treasury Portfolio and any
         Security Entitlements with respect thereto or sell, liquidate or
         dispose of such assets through a broker designated by the Company, and
         to pay and deliver any income, proceeds or other funds derived
         therefrom to the Company. The Holders from time to time acting through
         the Forward Purchase Contract Agent hereby further authorize and direct
         the Collateral Agent itself, as agent of the Company, to issue
         instructions and entitlement orders, and to otherwise take action, with
         respect to the Collateral Account, the Collateral credited thereto and
         any Security Entitlements with respect thereto, pursuant to the terms
         and provisions hereof, all without the necessity of obtaining the
         further consent of the Forward Purchase Contract Agent or any of the
         Holders. The Collateral Agent shall be the agent of the Company and
         shall act only in accordance with the terms hereof. Without limiting
         the generality of the foregoing, the Collateral Agent shall issue
         entitlement orders to the Securities Intermediary as directed in
         writing by the Company.

                  (b) The Securities Intermediary hereby confirms and agrees
         that:

                           (i) all securities or other property underlying any
                  financial assets credited to the Collateral Account shall be
                  registered in the name of the Securities Intermediary, or its
                  nominee, endorsed to the Securities Intermediary, or its
                  nominee, or in blank and in no case will any financial asset
                  credited to the Collateral Account be registered in the name
                  of the Forward Purchase Contract Agent, the Collateral Agent
                  as such, the Company or any Holder, payable to the order of,
                  or specially endorsed to, the Forward Purchase Contract Agent,
                  the Collateral Agent as such, the Company or any Holder except
                  to the extent the foregoing have been specially endorsed to
                  the Securities Intermediary or in blank;

                                       6

<PAGE>

                           (ii) all property delivered to the Securities
                  Intermediary pursuant to this Agreement (including, without
                  limitation, any Notes, Treasury Consideration, Treasury
                  Securities or Applicable Ownership Interest in the Treasury
                  Portfolio) will be promptly credited to the Collateral
                  Account;

                           (iii) the Collateral Account is an account to which
                  financial assets are or may be credited, and the Securities
                  Intermediary shall, subject to the terms of this Agreement,
                  treat the Forward Purchase Contract Agent as entitled to
                  exercise the rights of any financial asset credited to the
                  Collateral Account;

                           (iv) the Securities Intermediary has not entered
                  into, and until the termination of this Agreement will not
                  enter into, any agreement with any other Person relating to
                  the Collateral Account and/or any financial assets credited
                  thereto pursuant to which it has agreed to comply with
                  entitlement orders (as defined in Section 8-102(a)(8) of the
                  Code) of such other Person;

                           (v) the Securities Intermediary has not entered into,
                  and until the termination of this Agreement will not enter
                  into, any agreement with the Company, the Collateral Agent or
                  the Forward Purchase Contract Agent purporting to limit or
                  condition the obligation of the Securities Intermediary to
                  comply with entitlement orders as set forth in this Section
                  2.2;

                           (vii) 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" within the meaning of Section 8-102(a)(9) of
                  the Code; and

                           (vii) in the event of any conflict between this
                  Agreement (or any portion thereof) and any other agreement now
                  existing or hereafter entered into, the terms of this
                  Agreement shall prevail.

                  (c) The Forward Purchase Contract Agent hereby irrevocably
         constitutes and appoints the Collateral Agent and the Company, with
         full power of substitution, as the Forward Purchase Contract Agent's
         attorney-in-fact to take on behalf of, and in the name, place and stead
         of, the Forward Purchase Contract Agent and the Holders, any action
         necessary or desirable to perfect and to keep perfected the security
         interest in the Collateral referred to in Section 2.1. The grant of
         such power-of-attorney shall not be deemed to require of the Collateral
         Agent any specific duties or obligations not otherwise assumed by the
         Collateral Agent hereunder. Notwithstanding the foregoing, in no event
         shall the Collateral Agent or Securities Intermediary be responsible
         for the preparation or filing of any financing or continuation
         statements in the appropriate jurisdictions or responsible for
         maintenance or perfection of any security interest hereunder.

                  (d) The Forward Purchase Contract Agent shall file with the
         Internal Revenue Service and deliver to the Holders Forms 1099 (or
         successor or comparable forms), to the extent required by law, with
         respect to payments by the Holders. Neither the Securities Intermediary
         nor the Collateral Agent shall have any tax reporting duties hereunder.

                                       7

<PAGE>

                                   ARTICLE III

                         PAYMENTS ON PLEDGED COLLATERAL

     SECTION 3.1     Payments.

          So long as the Forward Purchase Contract Agent is the registered owner
     of the Pledged Notes, Pledged Treasury Consideration, Pledged Applicable
     Ownership Interest in the Treasury Portfolio or Pledged Treasury
     Securities, it shall receive all payments thereon. If the Pledged Notes are
     reregistered, such that the Collateral Agent becomes the registered holder,
     all payments of the principal of, or interest or other amounts on, the
     Pledged Notes and all payments of the principal of, or cash distributions
     on, any Pledged Treasury Consideration, Pledged Treasury Securities or
     Pledged Applicable Ownership Interest in the Treasury Portfolio that are
     received by the Collateral Agent and that are properly payable hereunder,
     shall be paid by the Collateral Agent by wire transfer in same day funds:

               (i)   in the case of (A) any interest payments with respect to
          the Pledged Notes, the Pledged Treasury Consideration or the
          appropriate Pledged Applicable Ownership Interest in the Treasury
          Portfolio (as specified in clause (B) of the definition of Applicable
          Ownership Interest), as the case may be, with respect to Equity Units
          which include Pledged Notes, Pledged Treasury Consideration or the
          appropriate Pledged Applicable Ownership Interest in the Treasury
          Portfolio, as the case may be, and (B) any payments of principal or,
          if applicable, the appropriate Applicable Ownership Interest in the
          Treasury Portfolio (as specified in clause (A) of the definition of
          Applicable Ownership Interest) with respect to any Notes, Treasury
          Consideration or the appropriate Applicable Ownership Interest in the
          Treasury Portfolio, as the case may be, that have been released from
          the Pledge pursuant to Section 4.3 hereof, to the Forward Purchase
          Contract Agent, for the benefit of the relevant Holders of the Equity
          Units, to the account designated by the Forward Purchase Contract
          Agent for such purpose, no later than 10:00 a.m., New York City time,
          on the Business Day such payment is received by the Collateral Agent
          (provided that in the event such payment is received by the Collateral
          Agent on a day that is not a Business Day or after 9:00 a.m., New York
          City time, on a Business Day, then such payment shall be made no later
          than 9:30 a.m., New York City time, on the next succeeding Business
          Day);

               (ii)  in the case of any payments with respect to any Treasury
          Securities that have been released from the Pledge pursuant to Section
          4.3 hereof, to the Holders of the Stripped Units to the accounts
          designated by them in writing for such purpose no later than 2:00
          p.m., New York City time, on the Business Day such payment is received
          by the Collateral Agent (provided that in the event such payment is
          received by the Collateral Agent on a day that is not a Business Day
          or after 10:00 a.m., New York City time, on a Business Day, then such
          payment

                                        8

<PAGE>

          shall be made no later than 10:30 a.m., New York City time, on the
          next succeeding Business Day); and

               (iii) in the case of payments in respect of any Pledged Notes,
          Pledged Treasury Consideration, Pledged Treasury Securities or the
          appropriate Pledged Applicable Ownership Interest (as specified in
          clause (A) of the definition of such term) in the Treasury Portfolio,
          as the case may be, to be paid upon settlement of the Holders'
          obligations to purchase Common Stock under the Forward Purchase
          Contract, to the Company on the Stock Purchase Date in accordance with
          the procedure set forth in Section 4.5(a) or 4.5(b) hereof, in full
          satisfaction of the respective obligations of the Holders under the
          related Forward Purchase Contracts.

     SECTION 3.2     Application of Payments.

          All payments received by the Forward Purchase Contract Agent as
     provided herein shall be applied by the Forward Purchase Contract Agent
     pursuant to the provisions of the Forward Purchase Contract Agreement. If,
     notwithstanding the foregoing, the Forward Purchase Contract Agent shall
     receive any payments of principal on account of any Note, Treasury
     Consideration or the appropriate Applicable Ownership Interest (as
     specified in clause (A) of the definition of such term) in the Treasury
     Portfolio, as applicable, that, at the time of such payment, is a Pledged
     Note, Pledged Treasury Consideration or Pledged Applicable Ownership
     Interest (as specified in clause (A) of the definition of such term) in the
     Treasury Portfolio, as the case may be, or a Holder of Stripped Units shall
     receive any payments of principal on account of any Treasury Securities
     that, at the time of such payment, are Pledged Treasury Securities, the
     Forward Purchase Contract Agent or such Holder shall hold the same as
     trustee of an express trust for the benefit of the Company (and promptly
     deliver the same over to the Company) for application to the obligations of
     the Holders under the related Forward Purchase Contracts, and the Holders
     shall acquire no right, title or interest in any such payments of principal
     so received.

                                   ARTICLE IV

             SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF NOTES

     SECTION 4.1     Collateral Substitution and the Creation of Stripped Units.

          Unless a successful remarketing or a Tax Event Redemption has
     occurred, at any time on or prior to the tenth Business Day immediately
     preceding the Stock Purchase Date, a Holder of Equity Units shall have the
     right to substitute Treasury Securities for the Pledged Notes securing such
     Holder's obligations under the Forward Purchase Contracts comprising a part
     of such Equity Units, in integral multiples of 20 Equity Units by (a)
     Transferring to the Collateral Agent Treasury Securities having an
     aggregate principal amount equal to the aggregate Stated Amount of such
     Equity Units and (b) delivering such Equity Units to the Forward Purchase
     Contract Agent, accompanied by a

                                        9

<PAGE>

     notice, substantially in the form of Exhibit B hereto, to the Forward
     Purchase Contract Agent stating that such Holder has Transferred Treasury
     Securities to the Collateral Agent pursuant to clause (a) above (stating
     the principal amount and the CUSIP numbers of the Treasury Securities
     Transferred by such Holder) and requesting that the Forward Purchase
     Contract Agent instruct the Collateral Agent to release from the Pledge the
     Pledged Notes related to such Equity Units, whereupon the Forward Purchase
     Contract Agent shall promptly give such instruction in writing to the
     Collateral Agent in the form provided in Exhibit A; provided that such
     Holder may not substitute such Treasury Securities for such Pledged Notes
     pursuant to this Section 4.1 during the period from four Business Days
     prior to any Remarketing Period until the expiration of three Business Days
     after the end of such Remarketing Period. Upon receipt of Treasury
     Securities from a Holder of Equity Units and the related written
     instruction from the Forward Purchase Contract Agent, the Collateral Agent
     shall release the Pledged Notes and shall promptly Transfer such Pledged
     Notes free and clear of any lien, pledge or security interest created
     hereby, to the Forward Purchase Contract Agent. All items Transferred
     and/or substituted by any Holder pursuant to this Section 4.1, Section 4.2
     or any other Section of this Agreement shall be Transferred and/or
     substituted free and clear of all liens, claims and encumbrances.

     SECTION 4.2     Collateral Substitution and the Re-Creation of Equity
                     Units.

          Unless a successful remarketing or a Tax Event Redemption has
     occurred, at any time on or prior to the tenth Business Day immediately
     preceding the Stock Purchase Date, a Holder of Stripped Units shall have
     the right to reestablish Equity Units consisting of the Forward Purchase
     Contracts and Notes in integral multiples of 20 Equity Units by (x)
     Transferring to the Collateral Agent Notes having an aggregate principal
     amount equal to the aggregate stated amount of such Stripped Units and (y)
     delivering such Stripped Units to the Forward Purchase Contract Agent,
     accompanied by a notice, substantially in the form of Exhibit B hereto, to
     the Forward Purchase Contract Agent stating that such Holder has
     Transferred Notes to the Collateral Agent pursuant to clause (x) above and
     requesting that the Forward Purchase Contract Agent instruct the Collateral
     Agent to release from the Pledge the Pledged Treasury Securities related to
     such Stripped Units, whereupon the Forward Purchase Contract Agent shall
     give such instruction to the Collateral Agent in the form provided in
     Exhibit A; provided that such Holder of Stripped Units shall not have the
     right to reestablish Equity Units pursuant to this Section 4.2 during the
     period from four Business Days prior to any Remarketing Period until the
     expiration of three Business Days after the end of such Remarketing Period.
     Upon receipt of the Notes from such Holder and the instruction from the
     Forward Purchase Contract Agent, the Collateral Agent shall release the
     Pledged Treasury Securities and shall promptly Transfer such Pledged
     Treasury Securities, free and clear of any lien, pledge or security
     interest created hereby, to the Forward Purchase Contract Agent.

                                       10

<PAGE>

     SECTION 4.3     Termination Event.

          (a) Upon receipt by the Collateral Agent of written notice from the
     Company or the Forward Purchase Contract Agent that there has occurred a
     Termination Event, the Collateral Agent shall release all Collateral from
     the Pledge and shall promptly Transfer any Pledged Notes, Pledged Treasury
     Consideration or Pledged Applicable Ownership Interest in the Treasury
     Portfolio, as the case may be, and Pledged Treasury Securities to the
     Forward Purchase Contract Agent for the benefit of the Holders of the
     Equity Units and the Stripped Units, respectively, free and clear of any
     lien, pledge or security interest or other interest created hereby.

          (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 Notes, Pledged Treasury Consideration, Pledged Applicable Ownership
     Interest in the Treasury Portfolio, or Pledged Treasury Securities, as the
     case may be, as provided by this Section 4.3, the Forward Purchase Contract
     Agent shall:

               (i)   use its best efforts to 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 4.3, and shall deliver such
          opinion to the Collateral Agent within ten days after the occurrence
          of such Termination Event, and if (y) the Forward Purchase Contract
          Agent shall be unable to obtain such opinion within ten days after the
          occurrence of such Termination Event or (z) the Collateral Agent shall
          continue, after delivery of such opinion, to refuse to effectuate the
          release and Transfer of all Pledged Notes, Pledged Treasury
          Consideration, Pledged Applicable Ownership Interest in the Treasury
          Portfolio or Pledged Treasury Securities, as the case may be, as
          provided in this Section 4.3, then the Forward Purchase Contract Agent
          shall within fifteen days after the occurrence of such Termination
          Event commence an action or proceeding in the court with 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 Notes, Pledged Treasury Consideration, Pledged
          Applicable Ownership Interest in the Treasury Portfolio or Pledged
          Treasury Securities, as the case may be, as provided by this Section
          4.3 or

               (ii)  commence an action or proceeding like that described in
          subsection (i)(z) hereof within ten days after the occurrence of such
          Termination Event.

     SECTION 4.4     Early Settlement; Merger Early Settlement; Cash Settlement.

          Upon written notice to the Collateral Agent by the Forward Purchase
     Contract Agent that one or more Holders of Equity Units or Stripped Units
     have elected to effect

                                       11

<PAGE>

     Early Settlement, Merger Early Settlement or Cash Settlement of their
     respective obligations under the Forward Purchase Contracts forming a part
     of such Equity Units or Stripped Units in accordance with the terms of the
     Forward Purchase Contracts and the Forward Purchase Contract Agreement
     (setting forth the number of such Forward Purchase Contracts as to which
     such Holders have elected to effect Early Settlement, Merger Early
     Settlement or Cash Settlement), and that the Collateral Agent has received
     from such Holders, and paid to the Company, the related Early Settlement
     Amounts, Merger Early Settlement Amounts or Cash Settlement Amounts, as the
     case may be, pursuant to the terms of the Forward Purchase Contracts and
     the Forward Purchase Contract Agreement and that all conditions to such
     Early Settlement, Merger Early Settlement or Cash Settlement, as the case
     may be, have been satisfied, then the Collateral Agent shall release from
     the Pledge (a) Pledged Notes, Pledged Treasury Consideration or Pledged
     Applicable Ownership Interest in the Treasury Portfolio, as the case may
     be, in the case of a Holder of Equity Units or (b) Pledged Treasury
     Securities, in the case of a Holder of Stripped Units, relating to such
     Forward Purchase Contracts as to which such Holders have elected to effect
     Early Settlement, Merger Early Settlement or Cash Settlement, and shall
     Transfer all such Pledged Notes, Pledged Treasury Consideration, Pledged
     Applicable Ownership Interest in the Treasury Portfolio or Pledged Treasury
     Securities, as the case may be, free and clear of the Pledge created
     hereby, to the Forward Purchase Contract Agent for the benefit of such
     Holders.

     SECTION 4.5     Remarketing; Application of Proceeds; Settlement.

          (a) Pursuant to the Forward Purchase Contract Agreement, the Forward
     Purchase Contract Agent shall notify, by 10:00 a.m., New York City time, on
     the third Business Day preceding the Remarketing Date or the first day of
     any subsequent Remarketing Period, as the case may be, the Remarketing
     Agent and the Collateral Agent of the aggregate number of Notes comprising
     part of Equity Units to be remarketed. The Collateral Agent shall, by 10:00
     a.m., New York City time, on the third Business Day immediately preceding
     the Remarketing Date or the first day of any subsequent Remarketing Period,
     as the case may be, without any instruction from Holders of Equity Units,
     Transfer the Pledged Notes to be remarketed to the Remarketing Agent for
     remarketing. Upon completion of a successful remarketing which occurs prior
     to the fourth Business Day preceding the Stock Purchase Date, after
     deducting as the remarketing fee an amount not exceeding 25 basis points
     (0.25%) of the total proceeds of such remarketing of Pledged Notes, the
     Remarketing Agent will Transfer the Agent-purchased Treasury Consideration
     purchased from the proceeds of the remarketing to the Forward Purchase
     Contract Agent, which shall thereupon Transfer such Agent-purchased
     Treasury Consideration to the Collateral Agent. Upon receipt of the
     Agent-purchased Treasury Consideration from the Forward Purchase Contract
     Agent following a successful remarketing, (i) the Collateral Agent, for the
     benefit of the Company, shall thereupon hold in the Collateral Account such
     Agent-purchased Treasury Consideration (as defined in the Forward Purchase
     Contract Agreement) to secure such Equity Units Holders' obligations under
     the Forward Purchase Contracts and to fund the quarterly interest payment
     or payments due to Equity Units Holders on the Stock Purchase Date,

                                       12

<PAGE>

     and (ii) the remaining portion, if any, of the proceeds of such successful
     remarketing shall be distributed by the Remarketing Agent to the Forward
     Purchase Contract Agent for payment to such Equity Units Holders
     participating in such remarketing. On the Stock Purchase Date, the
     Collateral Agent shall, at the direction of the Company, (i) apply that
     portion of the payments received in respect of the Pledged Treasury
     Consideration equal to the aggregate Stated Amount of the related Equity
     Units to satisfy in full the obligations of such Equity Units Holders to
     pay the Purchase Price under the related Forward Purchase Contracts and
     (ii) apply the remaining portion to pay the quarterly interest payment due
     to Equity Units Holders on such Stock Purchase Date, which quarterly
     interest payment shall be paid on the Pledged Notes in an amount equal to
     the Coupon Rate for such quarterly interest payment. Upon completion of a
     successful remarketing which occurs on or after the fourth Business Day
     preceding the Stock Purchase Date, after deducting as the remarketing fee
     an amount not exceeding 25 basis points (0.25%) of the total proceeds of
     such remarketing of Pledged Notes, the Remarketing Agent will deliver the
     proceeds of such remarketing to the Forward Purchase Contract Agent, which
     shall thereupon deliver such proceeds to the Collateral Agent. Upon receipt
     of the proceeds from the Forward Purchase Contract Agent following a
     successful remarketing, (i) the Collateral Agent, for the benefit of the
     Company, shall thereupon apply such proceeds in direct settlement of the
     Equity Units Holders' obligations under the Forward Purchase Contracts and
     (ii) the remaining portion, if any, of the proceeds of such successful
     remarketing shall be distributed by the Remarketing Agent to the Forward
     Purchase Contract Agent for payment to such Equity Units Holders
     participating in such remarketing.

          (b) The Remarketing Agent shall make one or more attempts to remarket
     the Notes in accordance with the procedures set forth in the Forward
     Purchase Contract Agreement and the Remarketing Agreement. If by 4:00 p.m.,
     New York City time, on the third Business Day immediately preceding the
     Stock Purchase Date, the Remarketing Agent has failed to remarket the Notes
     at approximately, but not less than, 100.25% of the Remarketing Value (as
     described in the Forward Purchase Contract Agreement), the Last Failed
     Remarketing shall be deemed to have occurred. Within three Business Days
     following the Last Failed Remarketing, the Notes delivered to the
     Remarketing Agent pursuant to Section 4.5(a) hereof shall be returned to
     the Collateral Agent, together with written notice from the Remarketing
     Agent of such Last Failed Remarketing. In this case, the Remarketing Agent
     shall advise the Collateral Agent in writing that it cannot remarket the
     related Pledged Notes of such Holders of Equity Units and the Holders of
     Equity Units that have not made a Cash Settlement, Early Settlement or
     Merger Early Settlement shall be deemed to have directed the Company to
     retain or dispose of the Pledged Notes in satisfaction of their obligations
     under the Forward Purchase Contracts. The Collateral Agent, for the benefit
     of the Company will, at the written direction of the Company, retain or
     dispose of the Pledged Notes in accordance with applicable law and satisfy
     in full, from any such disposition or retention, such Holders' obligations
     to pay the Purchase Price for the Common Stock; provided, that if upon the
     Last Failed Remarketing, the Collateral Agent exercises such rights for the
     benefit of the Company with respect to such Notes, any accrued and unpaid
     interest on such Notes will become

                                       13

<PAGE>

     payable by the Company to the Forward Purchase Contract Agent for payment
     to the Holders of the Equity Units to which such Notes relate in accordance
     with the Forward Purchase Contract Agreement.

          (c) In the event a Holder of Stripped Units has not effected a Cash
     Settlement, Early Settlement or Merger Early Settlement of the Forward
     Purchase Contracts underlying its Stripped Units, such Holder shall be
     deemed to have elected to pay for the shares of Common Stock to be issued
     under such Forward Purchase Contracts from the payments received in respect
     of the related Pledged Treasury Securities. Without receiving any
     instruction from any such Holder, the Collateral Agent shall apply such
     payments to the settlement of such Forward Purchase Contracts on the Stock
     Purchase Date. In the event the payments received in respect of the related
     Pledged Treasury Securities are in excess of the aggregate Purchase Price
     under the Forward Purchase Contracts being settled thereby, the Collateral
     Agent shall distribute such excess, when received, to the Forward Purchase
     Contract Agent for the benefit of such Holders of the Stripped Units.

          (d) On or prior to the fourth Business Day preceding the Remarketing
     Date or the first day of any subsequent Remarketing Period, but no earlier
     than the Payment Date immediately preceding the last Payment Date before
     the Stock Purchase Date, holders of Separate Notes may elect to have their
     Separate Notes remarketed by Transferring their Separate Notes and
     delivering a notice of such election, substantially in the form of Exhibit
     C hereto, to the Custodial Agent. On the third Business Day prior to the
     Remarketing Date or the first day of any subsequent Remarketing Period, by
     10:00 a.m., New York City time, the Custodial Agent shall notify the
     Remarketing Agent of the number of such Separate Notes to be remarketed.
     The Custodial Agent will hold such Separate Notes in an account separate
     from the Collateral Account. A holder of Separate Notes electing to have
     its Separate Notes remarketed will also have the right to withdraw such
     election by written notice to the Custodial Agent, substantially in the
     form of Exhibit D hereto, on or prior to the fourth Business Day
     immediately preceding the applicable Remarketing Date or first day of a
     subsequent Remarketing Period, upon which notice the Custodial Agent will
     return such Separate Notes to such holder. On the third Business Day
     immediately preceding the Remarketing Date or the first day of any
     subsequent Remarketing Period, the Custodial Agent at the written direction
     of the Remarketing Agent will deliver to the Remarketing Agent for
     remarketing all Separate Notes delivered to the Custodial Agent pursuant to
     this Section 4.5(d) and not withdrawn pursuant to the terms hereof prior to
     such date. After deducting as the remarketing fee an amount not exceeding
     25 basis points (0.25%) of the total proceeds of such remarketing of such
     Separate Notes, the Remarketing Agent will remit to the Custodial Agent the
     portion of the proceeds from such remarketing, if successful, equal to the
     amount calculated in respect of such Separate Notes as set forth in Section
     1.6 of the Supplemental Indenture. If, despite using its commercially
     reasonable best efforts, the Remarketing Agent advises the Custodial Agent
     in writing that there has been a Failed Remarketing, the Remarketing Agent
     will promptly return such Separate Notes to the Custodial Agent for
     redelivery to such holders of such Separate Notes.

                                       14

<PAGE>

                                   ARTICLE V

                             VOTING RIGHTS -- NOTES

     SECTION 5.1    Exercise by Forward Purchase Contract Agent.

          Subject to the terms of the Forward Purchase Contract Agreement, the
     Forward Purchase Contract Agent may exercise, or refrain from exercising,
     any and all voting and other consensual rights pertaining to the 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 Forward Purchase
     Contract Agreement; provided, that the Forward Purchase Contract Agent
     shall not exercise or, as the case may be, shall not refrain from
     exercising such right if, in the judgment of the Company, such action would
     impair or otherwise have a material adverse affect on the value of all or
     any of the Pledged Notes; and provided, further, that the Forward Purchase
     Contract Agent shall give the Company and the Collateral Agent at least
     five 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 Notes, including notice of any meeting at which holders of Notes
     are entitled to vote or solicitation of consents, waivers or proxies of
     holders of Notes, the Collateral Agent shall use reasonable efforts to send
     promptly to the Forward Purchase Contract Agent such notice or
     communication, and as soon as reasonably practicable after receipt of a
     written request therefor from the Forward Purchase Contract Agent, execute
     and deliver to the Forward Purchase Contract Agent such proxies and other
     instruments in respect of such Pledged Notes (in form and substance
     satisfactory to the Collateral Agent) as are prepared by the Forward
     Purchase Contract Agent with respect to the Pledged Notes.

                                   ARTICLE VI

                    RIGHTS AND REMEDIES; TAX EVENT REDEMPTION

     SECTION 6.1    Rights and Remedies of the Collateral Agent.

          (a) In addition to the rights and remedies available at law or in
     equity, after an event of default under the Forward Purchase Contracts, the
     Collateral Agent shall have all of the rights and remedies with respect to
     the Collateral of a secured party under the Uniform Commercial Code (or any
     successor thereto) as in effect in the State of New York from time to time
     (the "Code") (whether or not the Code 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. Wherever reference is made in this Agreement to
     any section of the Code, such reference shall be deemed to include a
     reference to any provision of the Code, which is a successor to, or
     amendment of, such section. Without limiting the generality of the
     foregoing, such remedies may include, to the extent permitted by applicable
     law, (i) retention of the Pledged Notes or other Collateral in full
     satisfaction of the Holders'

                                       15

<PAGE>

     obligations under the Forward Purchase Contracts or (ii) sale of the
     Pledged Notes or other Collateral in one or more public or private sales,
     in each case at the written direction of the Company.

          (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 any Pledged Treasury
     Consideration, Pledged Applicable Ownership Interest in the Treasury
     Portfolio or Pledged Treasury Securities as provided in Article III hereof
     in satisfaction of the obligations of the Holder of the Equity Units or
     Stripped Units of which such Pledged Treasury Consideration, Pledged
     Applicable Ownership Interest in the Treasury Portfolio or Pledged Treasury
     Securities, as applicable, are a part under the related Forward Purchase
     Contracts, the inability to make such payments shall constitute an event of
     default under the Forward Purchase Contracts and the Collateral Agent shall
     have and may exercise, with reference to such Pledged Treasury
     Consideration, Pledged Applicable Ownership Interest in the Treasury
     Portfolio or Pledged Treasury Securities, as applicable, and such
     obligations of such Holder, any and all of the rights and remedies
     available to a secured party under the Code 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
     principal amount of, or interest on, the Pledged Notes, or (ii) the
     principal amount of, or interest (if any) on, the Pledged Treasury
     Consideration, Pledged Applicable Ownership Interest in the Treasury
     Portfolio or Pledged Treasury Securities, subject, in each case, to the
     provisions of Article III, and as otherwise granted herein.

          (d) The Forward Purchase Contract Agent, individually and as
     attorney-in-fact for each Holder of Equity Units and Stripped Units, agrees
     that, from time to time, upon the written request of the Company or the
     Collateral Agent (acting upon the written request of the Company), the
     Forward Purchase Contract Agent or such Holder shall execute and deliver
     such further documents and do such other acts and things as the Company or
     the Collateral Agent (acting upon the written request of the Company) 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 Forward Purchase Contract Agent shall have no liability to
     any Holder for executing any documents or taking any such acts requested by
     the Company or the Collateral Agent (acting upon the written request of the
     Company) hereunder, except for liability for its own negligent act, its own
     negligent failure to act, its bad faith or its own willful misconduct.

     SECTION 6.2    Substitutions.

          Whenever a Holder has the right to substitute Treasury Securities or
     Notes for Collateral held by the Collateral Agent, such substitution shall
     not constitute a novation of the security interest created hereby.

                                       16

<PAGE>

     SECTION 6.3    Tax Event Redemption.

          Upon the occurrence of a Tax Event Redemption prior to the earlier of
     a successful remarketing of the Pledged Notes or the Stock Purchase Date,
     the aggregate Redemption Price payable on the Tax Event Redemption Date
     with respect to such Pledged Notes shall be delivered to the Collateral
     Agent by the Trustee at or prior to 12:00 p.m., New York City time, by wire
     transfer in immediately available funds at such place and at such account
     as may be designated by the Collateral Agent in exchange for the Pledged
     Notes. In the event the Collateral Agent receives such Redemption Price,
     the Collateral Agent will, at the written direction of the Company, apply
     an amount, out of such Redemption Price, equal to the aggregate Tax Event
     Redemption Principal Amount with respect to the Pledged Notes to purchase
     from the Quotation Agent the Treasury Portfolio and promptly remit the
     remaining portion of such Redemption Price to the Forward Purchase Contract
     Agent for payment to the Holders of Equity Units. The Collateral Agent
     shall Transfer the Treasury Portfolio to the Collateral Account to secure
     the obligation of all Holders of Equity Units to purchase Common Stock of
     the Company under the Forward Purchase Contracts constituting a part of
     such Equity Units, in substitution for the Pledged Notes. Thereafter the
     Collateral Agent shall have such security interests, rights and obligations
     with respect to the Treasury Portfolio as it had in respect of the Pledged
     Notes as provided in Articles II, III, IV, V and VI, and any reference
     herein to the Notes shall be deemed to be a reference to such Treasury
     Portfolio, and any reference herein to interest on the Notes shall be
     deemed to be a reference to distributions on such Treasury Portfolio.

                                  ARTICLE VII

                    REPRESENTATIONS AND WARRANTIES; COVENANTS

     SECTION 7.1     Representations and Warranties.

          The Holders from time to time, acting through the Forward Purchase
     Contract Agent as their attorney-in-fact (it being understood that the
     Forward Purchase Contract Agent shall not be liable for any representation
     or warranty made by or on behalf of a Holder), hereby represent and warrant
     to the Collateral Agent, which representations and warranties shall be
     deemed repeated on each day a Holder Transfers Collateral that:

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

          (b) 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 Collateral Agent, 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 2.1 hereof;

                                       17

<PAGE>

          (c) upon the Transfer of the Collateral 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 Intermediary or other entity not within
     the control of the Holder involved in the Transfer of the Collateral,
     including the Collateral Agent, gives the notices and takes the action
     required of it hereunder and under applicable law for perfection of that
     interest and assuming the establishment and exercise of control pursuant to
     Section 2.2 hereof); and

          (d) 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 2.1 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 7.2     Covenants.

          The Holders from time to time, acting through the Forward Purchase
     Contract Agent as their attorney-in-fact (it being understood that the
     Forward 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:

          (a) neither the Forward 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

          (b) neither the Forward 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 sale or other
     disposition of the Equity Units and Stripped Units.

                                  ARTICLE VIII

                              THE COLLATERAL AGENT

     SECTION 8.1     Appointment, Powers and Immunities.

          (a) 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. Each of the Collateral Agent, the Custodial Agent and
     the Securities Intermediary:

               (i) shall have no duties or responsibilities except those
          expressly set forth in this Agreement and no implied covenants or
          obligations shall be inferred

                                       18

<PAGE>

          from this Agreement against any of them, nor shall any of them be
          bound by the provisions of any agreement by any party hereto beyond
          the specific terms hereof;

               (ii)  shall 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 Equity
          Units or Stripped Units or the Forward Purchase Contract Agreement, or
          for the value, validity, effectiveness, genuineness, enforceability or
          sufficiency of this Agreement (other than as against the Collateral
          Agent, the Custodial Agent or the Securities Intermediary, as the case
          may be), the Equity Units or Stripped Units or the Forward 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, the Custodial Agent or the
          Securities Intermediary, as the case may be) to perform any of its
          obligations hereunder or thereunder or for the perfection, priority
          or, except as expressly required hereby, existence, validity,
          perfection or maintenance of any security interest created hereunder;

               (iii) shall not be required to initiate or conduct any litigation
          or collection proceedings hereunder (except in the case of the
          Collateral Agent, pursuant to written directions furnished under
          Section 8.2 hereof, subject to Section 8.6 hereof);

               (iv)  shall 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 gross negligence or willful misconduct;
          and

               (v)   shall not be required to advise any party as to selling or
          retaining, or taking or refraining from taking any action with respect
          to, the Equity Units or Stripped Units 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.

          (b) No provision of this Agreement shall require the Collateral Agent,
     the Custodial Agent or the Securities Intermediary 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, the
     Custodial Agent or the Securities Intermediary be liable for any amount in
     excess of the value of the Collateral or for any special, indirect,
     individual or consequential damages or lost profits or loss of business,
     arising in connection with this Agreement even if the Collateral Agent, the
     Custodial Agent or the Securities Intermediary has been advised of the
     likelihood of such loss or damage being incurred and regardless of the form
     of action. Notwithstanding the foregoing, the Collateral Agent, the
     Custodial Agent, the Forward Purchase Contract Agent and the Securities
     Intermediary, each in its individual capacity, hereby waive any right of
     setoff,

                                       19

<PAGE>

     banker's lien, liens or perfection rights as securities intermediary or any
     counterclaim with respect to any of the Collateral.

          (c) The Collateral Agent, Custodial Agent and Securities Intermediary
     shall have no liability whatsoever for the action or inaction of any
     Clearing Agency or any book-entry system thereof. In no event shall any
     Clearing Agency or any book-entry system thereof be deemed an agent or
     subcustodian of the Collateral Agent, Custodial Agent and Securities
     Intermediary. The Collateral Agent, Custodial Agent and Securities
     Intermediary shall not be responsible or liable for any failure or delay in
     the performance of its obligations under this Agreement arising out of or
     caused, directly or indirectly, by circumstances beyond its reasonable
     control, including, without limitation, acts of God; earthquakes; fires;
     floods; war (whether declared or undeclared); terrorism; civil or military
     disturbances; sabotage; epidemics; riots; interruptions, loss or
     malfunctions of utilities, computer (hardware or software) or
     communications service; accidents; labor disputes; acts of civil or
     military authority; governmental actions; or inability to obtain labor,
     material, equipment or transportation.

     SECTION 8.2    Instructions of the Company.

          The Company shall have the right, by one or more instruments in
     writing executed and delivered to the Collateral Agent, the Custodial Agent
     or the Securities Intermediary, as the case may be, 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, the Custodial Agent or the
     Securities Intermediary, as the case may be, 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,
     the Custodial Agent and the Securities Intermediary shall each receive
     indemnity reasonably satisfactory to it as provided herein. Nothing in this
     Section 8.2 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 8.3    Reliance.

          Each of the Collateral Agent, the Custodial Agent and the Securities
     Intermediary shall be entitled conclusively to rely upon any certification,
     order, judgment, opinion, notice or other communication (including, without
     limitation, any thereof by telephone or facsimile) reasonably 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, the
     Custodial Agent or the Securities Intermediary, as the case may be. As to
     any matters not expressly provided for by this Agreement, the Collateral
     Agent, the Custodial Agent and the Securities Intermediary shall in all
     cases be fully protected in acting, or in refraining from acting,

                                       20

<PAGE>

     hereunder in accordance with instructions given by the Company in
     accordance with this Agreement.

     SECTION 8.4     Rights in Other Capacities.

          The Collateral Agent, the Custodial Agent and the Securities
     Intermediary and their affiliates may (without having to account therefor
     to the Company) accept deposits from, lend money to, make investments in
     and generally engage in any kind of banking, trust or other business with
     the Forward Purchase Contract Agent, any Holder of Equity Units or Stripped
     Units and any holder of Separate Notes (and any of their respective
     subsidiaries or affiliates) as if it were not acting as the Collateral
     Agent, the Custodial Agent or the Securities Intermediary, as the case may
     be, and the Collateral Agent, the Custodial Agent and the Securities
     Intermediary and their affiliates may accept fees and other consideration
     from the Forward Purchase Contract Agent, any Holder of Equity Units or
     Stripped Units or any holder of Separate Notes without having to account
     for the same to the Company; provided that each of the Collateral Agent,
     the Custodial Agent and the Securities Intermediary covenants and agrees
     with the Company that, except as provided in this Agreement, it shall not
     accept, receive or permit there to be created in favor of itself (and
     waives any right of set-off or banker's lien with respect to) 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 and the Collateral shall not be commingled with
     any other assets of any such Person.

     SECTION 8.5     Non-Reliance on Collateral Agent.

          None of the Collateral Agent, the Custodial Agent or the Securities
     Intermediary shall be required to keep itself informed as to the
     performance or observance by the Forward Purchase Contract Agent or any
     Holder of Equity Units or Stripped Units of this Agreement, the Forward
     Purchase Contract Agreement, the Equity Units or Stripped Units or any
     other document referred to or provided for herein or therein or to inspect
     the properties or books of the Forward Purchase Contract Agent or any
     Holder of Equity Units or Stripped Units. The Collateral Agent, the
     Custodial Agent and the Securities Intermediary shall not have any duty or
     responsibility to provide the Company or the Remarketing Agent with any
     credit or other information concerning the affairs, financial condition or
     business of the Forward Purchase Contract Agent, any Holder of Equity Units
     or Stripped Units or any holder of Separate Notes (or any of their
     respective subsidiaries or affiliates) that may come into the possession of
     the Collateral Agent, the Custodial Agent or the Securities Intermediary or
     any of their respective affiliates.

     SECTION 8.6     Compensation and Indemnity.

          The Company agrees:

          (a) to pay each of the Collateral Agent, the Custodial Agent and the
     Securities Intermediary from time to time such compensation as shall be
     agreed in writing between the Company and the Collateral Agent, the
     Custodial Agent or the Securities

                                       21

<PAGE>

     Intermediary, as the case may be, for all services rendered by each of them
     hereunder, and

          (b) to indemnify the Collateral Agent, the Custodial Agent, the
     Securities Intermediary and their officers, directors and agents for, and
     to hold each of them harmless from and against, any loss, liability or
     reasonable out-of-pocket expense incurred without gross negligence or
     willful misconduct 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 or collecting such amounts. The Collateral Agent, the
     Custodial Agent and the Securities Intermediary shall each promptly notify
     the Company of any third-party claim which may give rise to the 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.
     The provisions of this Section 8.6 shall survive the resignation or removal
     of the Collateral Agent, the Custodial Agent and the Securities
     Intermediary or the termination of this Agreement.

     SECTION 8.7     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, the Custodial Agent and the Securities Intermediary
     shall be entitled, after prompt notice to the Company and the Forward
     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 none of the
     Collateral Agent, the Custodial Agent or the Securities Intermediary shall
     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, the Custodial Agent and the Securities Intermediary
     shall be entitled to refuse to act until either (i) 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, reasonably satisfactory to the
     Collateral Agent, the Custodial Agent or the Securities Intermediary, as
     the case may be, or (ii) the Collateral Agent, the Custodial Agent or the
     Securities Intermediary, as the case may be, shall have received security
     or an indemnity reasonably satisfactory to the Collateral Agent, the
     Custodial Agent or the Securities Intermediary, as the case may be,
     sufficient to save the Collateral Agent, the Custodial Agent or the
     Securities Intermediary, as the case may be, harmless from and against any
     and all loss, liability or reasonable out-of-pocket expense which the
     Collateral Agent, the Custodial Agent or the Securities Intermediary, as
     the case may be, may incur by reason of its acting without willful
     misconduct or gross negligence. The Collateral Agent, the Custodial Agent
     or the Securities Intermediary may in addition elect to commence an
     interpleader action or seek other judicial relief or orders as the
     Collateral

                                       22

<PAGE>

     Agent, the Custodial Agent or the Securities Intermediary, as the case may
     be, may deem necessary. Notwithstanding anything contained herein to the
     contrary, none of the Collateral Agent, the Custodial Agent or 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.

     SECTION 8.8     Resignation.

          Subject to the appointment and acceptance of a successor Collateral
     Agent, the Custodial Agent or Securities Intermediary, as provided below,
     (a) the Collateral Agent, Custodial Agent and the Securities Intermediary
     may resign at any time by giving notice thereof to the Company and the
     Forward Purchase Contract Agent as attorney-in-fact for the Holders of
     Equity Units and Stripped Units, (b) the Collateral Agent, the Custodial
     Agent and the Securities Intermediary may be removed at any time by the
     Company and (c) if the Collateral Agent, the Custodial Agent or 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 Forward Purchase
     Contract Agent and such failure shall be continuing, the Collateral Agent,
     the Custodial Agent or the Securities Intermediary may be removed by the
     Forward Purchase Contract Agent. The Forward Purchase Contract Agent shall
     promptly notify the Company of any removal of the Collateral Agent, the
     Custodial Agent or the Securities Intermediary pursuant to clause (c) of
     the immediately preceding sentence. The Company shall promptly notify the
     Forward Purchase Contract Agent of any removal of the Collateral Agent, the
     Custodial Agent or the Securities Intermediary pursuant to clause (b) of
     the second preceding sentence. Upon notice of any such resignation or
     removal, the Company shall have the right to appoint a successor Collateral
     Agent, the Custodial Agent or Securities Intermediary, as the case may be.
     If no successor Collateral Agent, Custodial Agent or Securities
     Intermediary, as the case may be, shall have been so appointed and shall
     have accepted such appointment within 30 days after the retiring Collateral
     Agent's, the Custodial Agent's or Securities Intermediary's giving of
     notice of resignation or such removal, then the retiring Collateral Agent,
     the Custodial Agent or Securities Intermediary, as the case may be, may at
     the Company's expense petition any court of competent jurisdiction for the
     appointment of a successor Collateral Agent, the Custodial Agent or
     Securities Intermediary, as the case may be. Each of the Collateral Agent,
     the Custodial Agent and the Securities Intermediary shall be a bank which
     has an office in New York, New York with a combined capital and surplus of
     at least $500,000,000 or any affiliate of a bank holding company having
     such capital and surplus. Upon the acceptance of any appointment as
     Collateral Agent, Custodial Agent or Securities Intermediary, as the case
     may be, hereunder by a successor Collateral Agent, Custodial Agent or
     Securities Intermediary, as the case may be, such successor shall thereupon
     succeed to and become vested with all the rights, powers, privileges and
     duties of the retiring Collateral Agent, Custodial Agent or Securities
     Intermediary, as the case may be, and the retiring Collateral Agent,
     Custodial Agent or Securities Intermediary, as the case may be, shall take
     all appropriate action to transfer any money and property held

                                       23

<PAGE>

     by it hereunder (including the Collateral) to such successor after the
     payment of any outstanding fees, expenses and indemnities due and owing to
     such retiring party. The retiring Collateral Agent, Custodial Agent or
     Securities Intermediary shall, upon such succession, be discharged from its
     duties and obligations as Collateral Agent, Custodial Agent or Securities
     Intermediary hereunder. After any retiring Collateral Agent's, Custodial
     Agent's or Securities Intermediary's resignation hereunder as Collateral
     Agent, Custodial Agent or Securities Intermediary, the provisions of this
     Section 8.8, and Section 8.6 hereof, 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, Custodial Agent or Securities
     Intermediary. Any resignation or removal of the Collateral Agent hereunder
     shall be deemed for all purposes of this Agreement as the simultaneous
     resignation or removal of the Custodial Agent and the Securities
     Intermediary hereunder.

          Any corporation into which the Collateral Agent, the Custodial Agent
     or the Securities Intermediary, in its individual capacity, may be merged
     or converted or with which it may be consolidated, or any corporation
     resulting from any merger, conversion or consolidation to which the
     Collateral Agent in its individual capacity shall be a party, or any
     corporation to which substantially all of the corporate trust business of
     the Collateral Agent in its individual capacity may be transferred, shall
     be the Collateral Agent, the Custodial Agent, the Securities Intermediary,
     as the case may be respectively, under this Agreement without further act.

     SECTION 8.9     Right to Appoint Agent or Advisor.

          The Collateral Agent shall have the right to appoint or consult with
     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 (other than legal counsel) pursuant to
     this Section 8.9 shall be subject to prior consent of the Company, which
     consent shall not be unreasonably withheld.

     SECTION 8.10    Survival.

          The provisions of this Article VIII shall survive termination of this
     Agreement and the resignation or removal of the Collateral Agent, the
     Custodial Agent or the Securities Intermediary.

     SECTION 8.11    Exculpation.

          Anything in this Agreement to the contrary notwithstanding, in no
     event shall any of the Collateral Agent, the Custodial Agent or the
     Securities Intermediary or their officers, 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, the Custodial Agent or the Securities Intermediary,
     or any of them, and regardless of the form of action.

                                       24

<PAGE>

                                   ARTICLE IX

                                    AMENDMENT

         SECTION 9.1   Amendment Without Consent of Holders.

                  Without the consent of any Holders or the holders of any
         Separate Notes, the Company, when authorized by a Board Resolution, the
         Collateral Agent, the Custodial Agent, the Securities Intermediary and
         the Forward 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 Custodial Agent, the Securities Intermediary and
         the Forward Purchase Contract Agent, for any of the following purposes:

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

                           (ii)  to add to the covenants of the Company for the
                  benefit of the Holders, or to surrender any right or power
                  herein conferred upon the Company so long as such covenants or
                  such surrender does not adversely affect the validity,
                  perfection or priority of the security interests granted or
                  created hereunder; or

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

                           (iv)  to cure any ambiguity, to correct or supplement
                  any provisions herein which may be inconsistent with any other
                  provisions herein, or to 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 or

                           (v)   to permit the substitution by Holders of
                  designated Company debt instruments for the Pledged Notes as
                  Collateral under this Agreement.

         SECTION 9.2   Amendment with Consent of Holders.

                  With the consent of the Holders of not less than a majority of
         the Forward Purchase Contracts at the time outstanding voting together
         as one class, by Act of said Holders delivered to the Company, the
         Forward Purchase Contract Agent or the Collateral Agent, as the case
         may be, the Company, when duly authorized by a Board Resolution, the
         Forward Purchase Contract Agent, the Collateral Agent, the Custodial
         Agent and the Securities Intermediary 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 Equity Units or Stripped
         Units; provided, however, that no amendment agreement shall, without
         the consent of the Holder of each Outstanding Unit affected thereby,

                                       25

<PAGE>

                           (i)   change the amount or type of Collateral
                  underlying a Unit (except as provided in Section 9.1(v)) for
                  the rights of holders of Equity Units to substitute the
                  Treasury Securities for the Pledged Notes or the rights of
                  Holders of Stripped Units to substitute Notes for the Pledged
                  Treasury Securities), unless not adverse to the Holders,
                  impair the right of the Holder of any Equity Units or Stripped
                  Units to receive distributions on the underlying Collateral or
                  otherwise adversely affect the Holder's rights in or to such
                  Collateral; or

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

                           (iii) reduce the percentage of Forward Purchase
                  Contracts the consent of whose Holders is required for any
                  such amendment.

         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 9.3   Execution of Amendments.

                  In executing any amendment permitted by this Section, the
         Collateral Agent, the Custodial Agent, the Securities Intermediary and
         the Forward Purchase Contract Agent shall receive and (subject to
         Section 8.1 hereof, with respect to the Collateral Agent, and Section
         7.1 of the Forward Purchase Contract Agreement, with respect to the
         Forward Purchase Contract Agent) shall be fully protected in relying
         upon, an officer's certificate and 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 and, in the case of
         an amendment pursuant to Section 9.1, that such amendment does not
         adversely affect the validity, perfection or priority of the security
         interests granted or created hereunder.

         SECTION 9.4   Effect of Amendments.

                  Upon the execution of any amendment under this Article IX,
         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 Forward
         Purchase Contract Agreement shall be bound thereby.

         SECTION 9.5   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
         Forward Purchase Contract Agent, bear a notation in form approved by
         the Forward Purchase Contract Agent and the Collateral Agent as to any

                                       26

<PAGE>

         matter provided for in such amendment. If the Company shall so
         determine, new Certificates so modified as to conform, in the opinion
         of the Collateral Agent, the Forward 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 and
         delivered by the Forward Purchase Contract Agent in accordance with the
         Forward Purchase Contract Agreement in exchange for outstanding
         Certificates.

                                   ARTICLE X

                                  MISCELLANEOUS

         SECTION 10.1  No Waiver.

                  No failure on the part of any party hereto 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 any
         party hereto 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 10.2  GOVERNING LAW.

                  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
         ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Without limiting the
         foregoing, the above choice of law is expressly agreed to by the
         Securities Intermediary, the Collateral Agent, the Custodial Agent and
         the Holders from time to time acting through the Forward Purchase
         Contract Agent, as their attorney-in-fact, in connection with the
         establishment and maintenance of the Collateral Account, which law, for
         purposes of the Code, shall be deemed to be the law governing all
         Security Entitlements related thereto. In addition, such parties agree
         that, for purposes of the Code, New York shall be the Securities
         Intermediary's jurisdiction. The Company, the Collateral Agent and the
         Holders from time to time of the Equity Units and Stripped Units,
         acting through the Forward 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 and the Holders from time to time, acting through the Forward
         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 10.3  Notices.

                  Unless otherwise stated herein, all notices, requests,
         consents and other communications provided for herein (including,
         without limitation, any modifications of,

                                       27

<PAGE>

         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. Except as otherwise provided in this Agreement, all such
         communications shall be deemed to have been duly given when personally
         delivered or, in the case of a mailed notice or notice transmitted by
         telecopier, upon receipt, in each case given or addressed as aforesaid.

         SECTION 10.4  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 Custodial Agent, the Securities Intermediary and the Forward
         Purchase Contract Agent, and the Holders from time to time of the
         Equity Units and Stripped Units, 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 Forward Purchase Contract Agent.

         SECTION 10.5  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.

         SECTION 10.6  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 10.7  Expenses, Etc.

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

                  (a) all reasonable out-of-pocket costs and all reasonable
         expenses of the Collateral Agent, the Custodial Agent and the
         Securities Intermediary (including, without limitation, the reasonable
         fees and expenses of counsel to the Collateral Agent, the Custodial
         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;

                                       28

<PAGE>

                  (b) all reasonable costs and expenses of the Collateral Agent
         (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 Equity
         Units or Stripped Units to satisfy its obligations under the Forward
         Purchase Contracts forming a part of the Equity Units and Stripped
         Units and (ii) the enforcement of this Section 10.7; and

                  (c) 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 10.8  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:

                  (a) any lack of validity or enforceability of any provision of
         the Forward Purchase Contracts or the Equity Units or Stripped Units or
         any other agreement or instrument relating thereto;

                  (b) 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 Equity Units or Stripped Units under the
         related Forward Purchase Contracts, or any other amendment or waiver of
         any term of, or any consent to any departure from any requirement of,
         the Forward Purchase Contract Agreement or any Forward Purchase
         Contract or any other agreement or instrument relating thereto; or

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

         SECTION 10.9  Waiver of Jury Trial.

                  EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH
         MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
         DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND
         UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
         RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
         RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

                                       29

<PAGE>

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

                                          AMERICAN ELECTRIC POWER COMPANY, INC.

                                          By:________________________________
                                             Name:
                                             Title:

                                          Address for Notices:

                                          American Electric Power Company, Inc.
                                          1 Riverside Plaza
                                          Columbus, Ohio 43215
                                          Attention: General Counsel
                                          Telecopy:  (614) 223-1687

                                       30

<PAGE>

                                          THE BANK OF NEW YORK, as Forward
                                          Purchase Contract Agent and as
                                          attorney-in-fact of the Holders from
                                          time to time of the Equity Units and
                                          Stripped Units

                                          By:___________________________
                                             Name:
                                             Title:

                                          Address for Notices:

                                          101 Barclay Street
                                          New York, New York 10286
                                          Attention: Corporate Trust Department
                                          Telecopy: (212) 328-8243

                                          THE BANK OF NEW YORK, as
                                          Collateral Agent, Custodial Agent and
                                          Securities Intermediary

                                          By:___________________________
                                             Name:
                                             Title:

                                          Address for Notices:

                                          101 Barclay Street
                                          New York, New York 10286
                                          Attention: Corporate Trust Department
                                          Telecopy: (212) 328-8243

                                       31

<PAGE>

                                    EXHIBIT A

                   INSTRUCTION FROM FORWARD PURCHASE CONTRACT
                            AGENT TO COLLATERAL AGENT

     The Bank of New York,
     as Collateral Agent
     101 Barclay Street
     New York, New York 10286
     Attention: Corporate Trust Department

          Re:  Equity Units of American Electric Power Company, Inc. (the
               "Company")

          We hereby notify you in accordance with Section [4.1] [4.2] of the
     Pledge Agreement, dated as of June 11, 2002 (the "Pledge Agreement"), among
     the Company, you, as Collateral Agent, Custodial Agent and Securities
     Intermediary and us, as Forward Purchase Contract Agent and as
     attorney-in-fact for the holders of [Equity Units] [Stripped Units] from
     time to time, that the holder of Equity Units or Stripped Units listed
     below (the "Holder") has elected to substitute $_____ aggregate principal
     amount of Treasury Securities (CUSIP No. 912803AG8) in exchange for the
     related [Pledged Notes] [Pledged Treasury Securities] held by you in
     accordance with the Pledge Agreement and has delivered to us a notice
     stating that the Holder has Transferred [Treasury Securities] [Notes] to
     you, as Collateral Agent. We hereby instruct you, upon receipt of such
     [Pledged Treasury Securities] [Pledged Notes], and upon the payment by such
     Holder of any applicable fees, to release the [Notes] [Treasury Securities]
     related to such [Equity Units] [Stripped Units] to us in accordance with
     the Holder's instructions. Capitalized terms used herein but not defined
     shall have the meaning set forth in the Pledge Agreement.

     Date: _________________________

                                             THE BANK OF NEW YORK,
                                             as Forward Purchase Contract Agent

                                             By:________________________________
                                                Name:
                                                Title:

                                       A-1

<PAGE>

          Please print name, Social Security or other Taxpayer Identification
     Number, if any, and address of registered Holder electing to substitute
     [Treasury Securities] [Notes] for the [Pledged Notes] [Pledged Treasury
     Securities]:

     Name:

     Social Security or other Taxpayer
     Identification Number, if any:

     Address:

                                       A-2

<PAGE>

                                    EXHIBIT B

                 INSTRUCTION TO FORWARD PURCHASE CONTRACT AGENT

     The Bank of New York,
     As Forward Purchase Contract Agent
     101 Barclay Street
     New York, New York 10286
     Attention: Corporate Trust Department
     Telecopy: (212) 328-8243

          Re: Equity Units of American Electric Power Company, Inc. (the
     "Company")

          The undersigned Holder hereby notifies you that it has delivered to
     The Bank of New York, as Collateral Agent, Custodial Agent and Securities
     Intermediary [$_______ aggregate principal amount of Notes] [$_______
     aggregate principal amount of Treasury Securities (CUSIP No. 912803AG8)] in
     exchange for the related [Pledged Notes] [Pledged Treasury Securities] held
     by the Collateral Agent, in accordance with Section [4.1] [4.2] of the
     Pledge Agreement, dated June 11, 2002 (the "Pledge Agreement"), among you,
     the Company and the Collateral Agent. The undersigned Holder has paid the
     Collateral Agent all applicable fees relating to such exchange. The
     undersigned Holder hereby instructs you to instruct the Collateral Agent to
     release to you on behalf of the undersigned Holder the [Pledged Notes]
     [Pledged Treasury Securities] related to such [Equity Units] [Stripped
     Units]. Capitalized terms used herein but not defined shall have the
     meaning set forth in the Pledge Agreement.

     Date: ___________________             Signature:___________________________

                                           Signature Guarantee:
                                           ___________________________

     Name:

     Social Security or other Taxpayer
     Identification Number, if any:

     Address:

                                       B-1

<PAGE>

                                    EXHIBIT C

              INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING

     The Bank of New York,
     as Custodial Agent
     101 Barclay Street
     New York, New York 10286
     Attention: Corporate Trust Department

          Re: Notes of American Electric Power Company, Inc. (the "Company")

          The undersigned hereby notifies you in accordance with Section 4.5(d)
     of the Pledge Agreement, dated as of June 11, 2002 (the "Pledge
     Agreement"), among the Company, yourselves, as Collateral Agent, Securities
     Intermediary and Custodial Agent, and The Bank of New York, as Forward
     Purchase Contract Agent and as attorney-in-fact for the Holders of Equity
     Units and Stripped Units from time to time, that the undersigned elects to
     deliver $________ aggregate principal amount of Notes for delivery to the
     Remarketing Agent [on the fourth Business Day immediately preceding the
     Remarketing Date], [on the first day of the next scheduled Remarketing
     Period] for remarketing pursuant to Section 4.5(d) of the Pledge Agreement.
     The undersigned will, upon request of the Remarketing Agent, execute and
     deliver any additional documents deemed by the Remarketing Agent or by the
     Company to be necessary or desirable to complete the sale, assignment and
     transfer of the Notes tendered hereby.

          The undersigned hereby instructs you, upon receipt of the proceeds of
     such remarketing from the Remarketing Agent, net of amounts payable to the
     Remarketing Agent in accordance with the Pledge Agreement, to deliver such
     proceeds to the undersigned in accordance with the instructions indicated
     herein under "A. Payment Instructions." The undersigned hereby instructs
     you, in the event of a Failed Remarketing, upon receipt of the Notes
     tendered herewith from the Remarketing Agent, to deliver the Notes to the
     person(s) at the address indicated herein under "B. Delivery Instructions."
     Notwithstanding the foregoing, in the event that such Failed Remarketing
     constitutes the Last Failed Remarketing, you shall retain all such Notes.

          With this notice, the undersigned hereby (i) represents and warrants
     that the undersigned has full power and authority to tender, sell, assign
     and transfer the Notes tendered hereby and that the undersigned is the
     record owner of any Notes tendered herewith in physical form or a
     participant in The Depository Trust Company ("DTC") and the beneficial
     owner of any Notes tendered herewith by book-entry transfer to your account
     at DTC and (ii) agrees to be bound by the terms and conditions of Section
     4.5(d) of the Pledge Agreement. Capitalized terms used herein but not
     defined shall have the meaning set forth in the Pledge Agreement.

                                       C-1

<PAGE>

     Date: ___________________             Signature:___________________________

                                           Signature Guarantee:
                                           _________________________

     Name:

     Social Security or other Taxpayer
     Identification Number, if any:

     Address:

                                       C-2

<PAGE>

     A.   PAYMENT INSTRUCTIONS

          Proceeds of the remarketing should be paid by check in the name of the
     person(s) set forth below and mailed to the address set forth below.

     Name(s):
     ________________________________
              (Please Print)

     Address:
     ________________________________
        (Zip Code) (Please Print)

     (Taxpayer Identification or Social Security
                        Number):

     B.   DELIVERY INSTRUCTIONS

          In the event of a Failed Remarketing, Notes which are in physical form
     should be mailed to the person(s) set forth below at the address set forth
     below.

     Name(s):
     ________________________________
              (Please Print)

     Address:
     ________________________________
        (Zip Code) (Please Print)

     (Taxpayer Identification or Social Security
                        Number):

          In the event of a Failed Remarketing, Notes which are in book-entry
     form should be credited to the account at The Depository Trust Company set
     forth below.

     Name of Account Party:                     DTC Account Number:

                                       C-3

<PAGE>

                                    EXHIBIT D

                    INSTRUCTION TO CUSTODIAL AGENT REGARDING
                           WITHDRAWAL FROM REMARKETING

     The Bank of New York,
     as Collateral Agent
     101 Barclay Street
     New York, New York 10286
     Attention: Corporate Trust Department

               Re:  Notes of American Electric Power Company, Inc. (the
                    "Company")

          The undersigned hereby notifies you in accordance with Section 4.5(d)
     of the Pledge Agreement, dated as of June 11, 2002 (the "Pledge
     Agreement"), among the Company, yourselves, as Collateral Agent, Securities
     Intermediary and Custodial Agent and The Bank of New York, as Forward
     Purchase Contract Agent and as attorney-in-fact for the Holders of Equity
     Units and Stripped Units from time to time, that the undersigned elects to
     withdraw the $_____ aggregate principal amount of Notes delivered to the
     Custodial Agent on ___________, ____ for remarketing pursuant to Section
     4.5(d) of the Pledge Agreement. The undersigned hereby instructs you to
     return such Notes to the undersigned in accordance with the undersigned's
     instructions. With this notice, the undersigned hereby agrees to be bound
     by the terms and conditions of Section 4.5(d) of the Pledge Agreement.
     Capitalized terms used herein but not defined shall have the meaning set
     forth in the Pledge Agreement.

     Name(s):
     ________________________________
              (Please Print)

     Address:
     ________________________________
        (Zip Code) (Please Print)

     (Taxpayer Identification or Social Security
                       Number):

     A.   DELIVERY INSTRUCTIONS

          In the event of a Failed Remarketing, Notes which are in physical form
     should be mailed to the person(s) set forth below at the address set forth
     below.

     Name(s):
     ________________________________

                                       D-1

<PAGE>

              (Please Print)

     Address:
     ________________________________
        (Zip Code) (Please Print)

     (Taxpayer Identification or Social Security
                       Number):

          In the event of a Failed Remarketing, Notes which are in book-entry
     form should be credited to the account at The Depository Trust Company set
     forth below.

     Name of Account Party:                 DTC Account Number:

                                       D-2

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