Document:

EXHIBIT 4(E)

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                            AEP TEXAS CENTRAL COMPANY

                                       TO

                                 BANK ONE, N.A.

                                   AS TRUSTEE

                          FOURTH SUPPLEMENTAL INDENTURE

                          DATED AS OF FEBRUARY 1, 2003

                                  $100,000,000

                     FLOATING RATE NOTES, SERIES A DUE 2005

                     FLOATING RATE NOTES, SERIES B DUE 2005

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                               TABLE OF CONTENTS*

                                                                            PAGE

ARTICLE I Additional Definitions...............................................2

         SECTION 1.01.   Definitions...........................................2

ARTICLE II Floating Rate Notes.................................................4

         SECTION 2.01.   Establishment.........................................4
         SECTION 2.02.   Aggregate Principal Amount............................4
         SECTION 2.03.   Maturity and Interest.................................4
         SECTION 2.04.   Optional Redemption.  The Floating Rate Notes will not
                         be subject to optional redemption.....................7
         SECTION 2.05.   Limitation on Secured Debt............................7
         SECTION 2.06.   Global Securities and Certificated Securities.........8
         SECTION 2.07.   Form of Securities....................................8
         SECTION 2.08.   Transfer and Exchange.................................8

ARTICLE III Miscellaneous Provisions...........................................8

         SECTION 3.01.   Recitals by Company...................................8
         SECTION 3.02.   Ratification and Incorporation of Original Indenture..8
         SECTION 3.03.   Executed in Counterparts..............................8
         SECTION 3.04.   Legends...............................................8
         SECTION 3.05.   Applicability of Section 4.05 and Article Ten of
                         Original Indenture....................................8

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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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       THIS FOURTH SUPPLEMENTAL INDENTURE is made as of the 1st day of February,
2003, between AEP TEXAS CENTRAL COMPANY, a corporation duly organized and
existing under the laws of the state of Texas (herein called the "Company"),
having its principal office at 1 Riverside Plaza, Columbus, Ohio 43215 and Bank
One, N.A., a national banking association, duly organized and existing under the
laws of the United States, having its principal corporate trust office at 1111
Polaris Parkway, Columbus, Ohio 43240, as Trustee (herein called the "Trustee").

                              W I T N E S S E T H:

       WHEREAS, the Company has heretofore entered into an Indenture, dated as
of February 1, 2003 (the "Original Indenture"), with the Trustee;

       WHEREAS, the Original Indenture is incorporated herein by this reference
and the Original Indenture, as supplemented by this Fourth Supplemental
Indenture and by a First Supplemental Indenture (the "First Supplemental
Indenture"), a Second Supplemental Indenture (the "Second Supplemental
Indenture") and a Third Supplemental Indenture (the "Third Supplemental
Indenture"), all dated as of the date hereof, is herein called the "Indenture";

       WHEREAS, under the Original Indenture, a new series of unsecured notes
(the "Senior Notes") may at any time be established by the Board of Directors of
the Company in accordance with the provisions of the Original Indenture and the
terms of such series may be described by a supplemental indenture executed by
the Company and the Trustee;

       WHEREAS, the Company proposes to create under the Indenture a series of
Senior Notes to be designated the "Floating Rate Notes, Series A due 2005" (the
"Floating Rate Series A Notes") and a series of Senior Notes to be designated
the "Floating Rate Notes, Series B due 2005" (the "Floating Rate Series B Notes"
and, together with the Floating Rate Series A Notes, the "Floating Rate Notes"),
the form and substance of the Floating Rate Notes and the terms, provisions and
conditions thereof to be set forth as provided in the Original Indenture and
this Fourth Supplemental Indenture;

       WHEREAS, concurrently with the issuance of the Floating Rate Series A
Notes, the Company proposes to create under the Indenture a series of Senior
Notes to be designated the "5.50% Senior Notes, Series A due 2013" (the "Series
A Notes") and a series of Senior Notes to be designated the "5.50% Senior Notes,
Series D due 2013" (the "Series D Notes" and, together with the Series A Notes,
the "2013 Notes"); a series of Senior Notes to be designated "6.65% Senior
Notes, Series B due 2033" (the "Series B Notes") and a series of Senior Notes to
be designated the "6.65% Senior Notes, Series E due 2033" (the "Series E Notes"
and, together with the Series B Notes, the "2033 Notes"); a series of Senior
Notes to be designated "3.00% Senior Notes, Series C due 2005" (the "Series C
Notes") and a series of Senior Notes to be designated the "3.00% Senior Notes,
Series F due 2005" (the "Series F Notes" and, together with the Series C Notes,
the "2005 Notes" and, the 2005 Notes, together with the 2013 Notes and the 2033
Notes, the "Additional Notes"), the form and substance of the Additional Notes
and the terms, provisions and conditions thereof to be set forth as provided in
the Original Indenture and the First Supplemental Indenture, the Second
Supplemental Indenture and the Third Supplemental Indenture;

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       WHEREAS, additional Senior Notes of other series hereafter established,
except as may be limited in the Original Indenture as at the time supplemented
and modified, may be issued from time to time pursuant to the Indenture as at
the time supplemented and modified; and

       WHEREAS, all conditions necessary to authorize the execution and delivery
of this Fourth Supplemental Indenture and to make it a valid and binding
obligation of the Company have been done or performed.

       NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:

                                   ARTICLE I

                             ADDITIONAL DEFINITIONS

              SECTION 1.01. DEFINITIONS.

              The following defined terms used herein shall, unless the context
otherwise requires, have the meanings specified below. Capitalized terms used
herein for which no definition is provided herein shall have the meanings set
forth in the Original Indenture.

       "Clearstream" means Clearstream Banking, societe anonyme, or any
successor securities clearing agency.

       "Distribution Compliance Period," with respect to the Floating Rate
Notes, means the period of 40 consecutive days beginning on and including the
later of (i) the day on which such Floating Rate Notes are first offered to
Persons other than distributors (as defined in Regulation S under the Securities
Act) in reliance on Regulation S and (ii) the Original Issue Date.

       "DTC" means The Depository Trust Company, the initial Clearing Agency.

       "Euroclear" means Euroclear Bank S.A./N.V., as operator of the Euroclear
System or any successor securities clearing agency.

       "Exchange Act" means the Securities Exchange Act of 1934, as amended.

       "Exchange Offer Registration Statement" shall have the meaning assigned
to it in the Registration Rights Agreement.

       "Generation-Related" has the meaning set forth in Section 3.05(a).

       "Global Securities" means global certificates representing the Floating
Rate Notes as described in Section 204.

       "Holder" means a registered holder of a Floating Rate Note.

       "Institutional Accredited Investor" has the meaning set forth in Section
2.04(a) hereof.

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      "Original Issue Date" means February 18, 2003.

       "Owner" means each Person who is the beneficial owner of a Global
Security as reflected in the records of the Depository or, if a Depository
participant is not the Owner, then as reflected in the records of a Person
maintaining an account with such Depository (directly or indirectly, in
accordance with the rules of such Depository).

       "Permanent Regulation S Global Security" has the meaning set forth in
Section 2.04(b).

       "QIBs" means qualified institutional buyers as defined in Rule 144A.

       "Registered Exchange Offer" shall have the meaning assigned to Exchange
Offer in the Registration Rights Agreement

       "Registration Rights Agreement" means the Registration Rights Agreement,
dated as of February 1, 2003 among the Company and the Initial Purchasers named
therein, relating to the registration of the 2005 Notes, and the Floating Rate
Notes under the Securities Act.

       "Regulation S" means Regulation S under the Securities Act and any
successor regulation thereto.

       "Rule 144" means Rule 144 under the Securities Act, as such rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the Securities and Exchange Commission.

       "Rule 144A" means Rule 144A under the Securities Act, as such rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the Securities and Exchange Commission.

       "Rule 144A Global Security" means any Floating Rate Series A Note that is
to be traded pursuant to Rule 144A.

       "Securities Act" means the Securities Act of 1933, as amended from time
to time, or any successor legislation.

       "Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depository), or any successor Person thereto and
shall initially be the Trustee.

       "Shelf Registration Statement" shall have the meaning assigned to it in
the Registration Rights Agreement.

       "Special Interest Premium" shall have the meaning assigned to it in the
Registration Rights Agreement.

       "Stated Maturity" means February 15, 2005.

       "Subsidiary" means any corporation or other entity of which sufficient
voting stock or other ownership or economic interests having ordinary voting
power to elect a majority of

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the board of directors (or equivalent body) are at the time directly or
indirectly held by the Company.

       "Temporary Regulation S Global Security" has the meaning set forth in
Section 2.04(b).

       "Transfer Restricted Security" shall have the meaning assigned to
Registrable Note in the Registration Rights Agreement.

                                   ARTICLE II

                               FLOATING RATE NOTES

              SECTION 2.01. ESTABLISHMENT.

              The Floating Rate Series A Notes shall be designated as the
Company's "Floating Rate Notes, Series A due 2005" and the Floating Rate Series
B Notes shall be designated as the Company's "Floating Rate Notes, Series B due
2005". The Floating Rate Series A Notes and the Floating Rate Series B Notes
shall be treated for all purposes under the Indenture as a single class or
series of Senior Notes.

              SECTION 2.02. AGGREGATE PRINCIPAL AMOUNT.

              The Trustee shall authenticate and deliver (i) Floating Rate
Series A Notes for original issue on the Original Issue Date in the aggregate
principal amount of $100,000,000 and (ii) Floating Rate Series B Notes from time
to time thereafter for issue only in exchange for Floating Rate Series A Notes
pursuant to the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement or pursuant to the Shelf Registration Statement in
accordance with the Registration Rights Agreement, in each case upon a Company
Order for authentication and delivery thereof and satisfaction of Section 2.01
of the Original Indenture. The aggregate principal amount of the Floating Rate
Notes shall be initially limited to $100,000,000 and shall be subject to
Periodic Offerings pursuant to Article Two of the Original Indenture. All
Floating Rate Notes need not be issued at the same time and such series may be
reopened at any time, without the consent of any Holder, for issuances of
additional Floating Rate Notes. Any such additional Floating Rate Notes will
have the same interest rate, maturity and other terms as those initially issued.
The Floating Rate Series A Notes shall be issued in definitive fully registered
form.

              SECTION 2.03. MATURITY AND INTEREST.

                     (i)    The Floating Rate Notes shall mature on, and the
              date on which the principal of the Floating Rate Notes shall be
              payable (unless earlier redeemed) shall be, February 15, 2005;

                     (ii)   the interest on the Notes shall be payable on
              February 15, May 15, August 15 and November 15 of each year (each,
              an "Interest Payment Date"), commencing on May 15, 2003 and shall
              accrue from and including the date of authentication of the Notes
              to, but excluding May 15, 2003, and thereafter, from and including
              each Interest Payment Date to, but excluding, the next succeeding

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              Interest Payment Date or Stated Maturity, as the case may be; the
              Regular Record Date for the determination of holders to whom
              interest is payable on any such Interest Payment Date shall be the
              fifteenth calendar day preceding the relevant Interest Payment
              Date; provided that interest payable on Stated Maturity shall be
              paid to the Person to whom principal shall be paid;

                     (iii)  the Floating Rate Notes will bear interest at a per
              annum rate ("Interest Rate") determined by the Calculation Agent,
              subject to the maximum interest rate permitted by New York or
              other applicable state law, as such law may be modified by United
              States law of general application. The Interest Rate for each
              Interest Period will be equal to LIBOR on the Interest
              Determination Date for such Interest Period plus 1.25%; provided,
              however, that in certain circumstances described below, the
              Interest Rate will be determined without reference to LIBOR.
              Promptly upon such determination, the Calculation Agent will
              notify the Trustee for the Floating Rate Notes, if the Trustee is
              not then serving as the Calculation Agent, of the interest rate
              for the new Interest Period. The interest rate determined by the
              Calculation Agent, absent manifest error, shall be binding and
              conclusive upon the beneficial owners and holders of the Floating
              Rate Notes, the Company and the Trustee for the Floating Rate
              Notes.

                     If the following circumstances exist on any Interest
              Determination Date, the Calculation Agent shall determine the
              Interest Rate for the Notes as follows:

                     (1)    In the event no Reported Rate (as defined below)
                     appears on Telerate Page 3750 (as defined below) as of
                     approximately 11:00 a.m. London time on an Interest
                     Determination Date, the Calculation Agent shall request the
                     principal London offices of each of four major banks in the
                     London interbank market selected by the Calculation Agent
                     (after consultation with the Company) to provide a
                     quotation of the rate (the "Rate Quotation") at which three
                     month deposits in amounts of not less than $1,0000,000 are
                     offered by it to prime banks in the London interbank
                     market, as of approximately 11:00 a.m. on such Interest
                     Determination Date, that is representative of single
                     transactions at such time (the "Representative Amounts").
                     If at least two Rate Quotations are provided, the interest
                     rate will be the arithmetic mean of the Rate Quotations
                     obtained by the Calculation Agent, plus 1.25%.

                     (2)    In the event no Reported Rate appears on Telerate
                     Page 3750 as of approximately 11:00 a.m. London time on an
                     Interest Determination Date and there are fewer than two
                     Rate Quotations, the interest rate will be the arithmetic
                     mean of the rates quoted at approximately 11:00 a.m. New
                     York City time on such Interest Determination Date, by
                     three major banks in New York City selected by the
                     Calculation Agent (after consultation with the Company),
                     for loans in Representative Amounts in U.S. dollars to
                     leading European banks, having an index maturity of three
                     months for a period commencing on the second London
                     Business Day immediately following such Interest
                     Determination Date, plus 1.25%; provided,

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                     however, that if fewer than three banks selected by the
                     Calculation Agent are quoting such rates, the interest rate
                     for the applicable Interest Period will be the same as the
                     interest rate in effect for the immediately preceding
                     Interest Period.

                     (3)    "Business Day" means any day that is not a day on
                     which banking institutions in New York City are authorized
                     or required by law or regulation to close.

                     "Calculation Agent" means Bank One, N.A., or its successor
                     appointed by the Company, acting as calculation agent.

                     "Interest Determination Date" means the second London
                     Business Day immediately preceding the first day of the
                     relevant Interest Period.

                     "Interest Period" means the period commencing on an
                     interest payment date for the Floating Rate Notes (or
                     commencing on the Original Issue Date, if no interest has
                     been paid or duly made available for payment since that
                     date) and ending on the day before the next succeeding
                     interest payment date for the Floating Rate Notes.

                     "LIBOR" for any Interest Determination Date will be the
                     offered rate for deposits in U.S. dollars having an index
                     maturity of three months for a period commencing on the
                     second London Business Day immediately following the
                     Interest Determination Date in amounts of not less than
                     $1,000,000, as such rate appears on Telerate Page 3750 or a
                     successor reporter of such rates selected by the
                     Calculation Agent and acceptable to the Company, at
                     approximately 11:00 a.m. London time on the Interest
                     Determination Date (the "Reported Rate").

                     "London Business Day" means a day other than a Saturday or
                     Sunday that is not a day on which banking institutions in
                     London, England and New York, New York are authorized or
                     obligated by law or executive order to be closed and a day
                     on which dealings in deposits in U.S. dollars are
                     transacted, or with respect to any future date are expected
                     to be transacted, in the London interbank market.

                     "Telerate Page 3750" means the display designated on page
                     3750 on Dow Jones Markets Limited (or such other page as
                     may replace the 3750 page on that service or such other
                     service as may be nominated by the British Bankers'
                     Association for the purpose of displaying London interbank
                     offered rates for U.S. dollar deposits).

                     (iv)   Upon the request of a holder of the Floating Rate
                     Notes, the Calculation Agent will provide to such holder
                     the interest rate in effect on the date of such request
                     and, if determined, the interest rate for the next Interest
                     Period.

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                     (v)    The accrued interest for any period is calculated by
                     multiplying the principal amount of a note by an accrued
                     interest factor. The accrued interest factor is computed by
                     adding the interest factor calculated for each day in the
                     period to the date for which accrued interest is being
                     calculated. The interest factor (expressed as a decimal
                     rounded upwards if necessary) is computed by dividing the
                     interest rate (expressed as a decimal rounded upwards if
                     necessary) applicable to such a date by 360.

                     (vi)   All percentages resulting from any calculation of
                     the interest rate on Floating Rate Notes will be rounded,
                     if necessary, to the nearest one-hundred thousandth of a
                     percentage point, with five one-millionths of a percentage
                     point rounded upwards, and all dollar amounts used in or
                     resulting from such calculation will be rounded to the
                     nearest cent (with one-half cent being rounded upwards).

                     (vii)  Special Interest Premium shall accrue on the
                     Transfer Restricted Securities over and above the interest
                     rate set forth herein in accordance with Section 2(e) of
                     the Registration Rights Agreement.

              SECTION 2.04. OPTIONAL REDEMPTION. The Floating Rate Notes will
                            not be subject to optional redemption.

              SECTION 2.05. LIMITATION ON SECURED DEBT.

              So long as any of the Floating Rate Notes are outstanding, the
Company shall not create or suffer to be created or to exist or permit any of
its Subsidiaries to create or suffer to be created or to exist any additional
mortgage, pledge, security interest, or other lien (collectively "Liens") on any
utility properties or tangible assets now owned or hereafter acquired by the
Company or its Subsidiaries to secure any indebtedness for borrowed money
("Secured Debt"), without providing that such Floating Rate Notes will be
similarly secured. Further, this restriction on Secured Debt does not apply to
the Company's existing first mortgage bonds that have previously been issued
under its mortgage indenture or any indenture supplemental thereto; provided
that this restriction will apply to future issuances thereunder (other than
issuances of refunding first mortgage bonds). In addition, this restriction does
not prevent the creation or existence of:

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

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

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

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

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

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

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

              SECTION 2.06. GLOBAL SECURITIES AND CERTIFICATED SECURITIES.

              (a) GENERAL. The Floating Rate Series A Notes will be resold
       initially only to (i) QIBs in reliance on Rule 144A under the Securities
       Act ("Rule 144A"), (ii) institutional "accredited investors" as such term
       is defined in rule 501(a)(1), (2), (3) and (7) of Regulation D under the
       Securities Act (each, an "Institutional Accredited Investor") and (iii)
       Persons other than U.S. Persons (as defined in Regulation S) in reliance
       on Regulation S under the Securities Act ("Regulation S"). Floating Rate
       Series A Notes may thereafter be transferred to, among others, QIBs,
       purchasers in reliance on Regulation S, and Institutional Accredited
       Investors in each case, subject to the restrictions on transfer set forth
       herein.

              (b) GLOBAL SECURITIES.

                     (i) FORM. Floating Rate Series A Notes initially resold
              pursuant to Rule 144A shall be issued initially in the form of one
              or more permanent Global Securities in definitive, fully
              registered form (collectively, the "Rule 144A Global Security")
              and Floating Rate Series A Notes initially resold pursuant to
              Regulation S and shall be issued initially in the form of one or
              more temporary global securities in definitive, fully registered
              form (collectively, the "Temporary Regulation S Global Security"),
              in each case without interest coupons and with the global
              securities legend and restricted securities legend set forth in
              Exhibit A hereto, which shall be deposited on behalf of the
              purchasers of the Floating Rate Series A Notes represented thereby
              with the Securities Custodian, and registered in the name of the
              Depository or a nominee of the Depository, duly executed by the
              Company and authenticated by the Trustee as provided in the
              Indenture.

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              Except as set forth in this Section 2.06, beneficial ownership
              interests in the Temporary Regulation S Global Security (x) will
              not be exchangeable for interests in the Rule 144A Global
              Security, the permanent global security (the "Permanent Regulation
              S Global Security"), or any other security without a legend
              containing restrictions on transfer of such security prior to the
              expiration of the Distribution Compliance Period and (y) then may
              be exchanged for interests in a Rule 144A Global Security or the
              Permanent Regulation S Global Security only upon certification
              that beneficial ownership interests in such Temporary Regulation S
              Global Security are owned either by non-U.S. persons or U.S.
              persons who purchased such interests in a transaction that did not
              require registration under the Securities Act.

              The Rule 144A Global Security, the Temporary Regulation S Global
       Security and the Permanent Regulation S Global Security are collectively
       referred to herein as "Global Securities". The aggregate principal amount
       of the Global Securities may from time to time be increased or decreased
       by adjustments made on the records of the Trustee and the Depository or
       its nominee as hereinafter provided.

                     (ii)   BOOK-ENTRY PROVISIONS. This Section shall apply only
              to a Global Security deposited with or on behalf of the
              Depository. The Company shall execute and the Trustee shall, in
              accordance with this Section 2.05(b)(ii), authenticate and deliver
              initially one or more Global Securities that (a) shall be
              registered in the name of the Depository for such Global Security
              or Global Securities or the nominee of such Depository and (b)
              shall be delivered by the Trustee to such Depository or pursuant
              to such Depository's instructions or held by the Trustee as
              custodian for the Depository.

              Members of, or participants in, the Depository ("Agent Members")
       shall have no rights under this Indenture with respect to any Global
       Security held on their behalf by the Depository or by the Trustee as the
       custodian of the Depository or under such Global Security, and the
       Company, the Trustee and any agent of the Company or the Trustee shall be
       entitled to treat the Depository as the absolute owner of such Global
       Security for all purposes whatsoever. Notwithstanding the foregoing,
       nothing herein shall prevent the Company, the Trustee or any agent of the
       Company or the Trustee from giving effect to any written certification,
       proxy or other authorization furnished by the Depository or impair, as
       between the Depository and its Agent Members, the operation of customary
       practices of such Depository governing the exercise of the rights of a
       holder of a beneficial interest in any Global Security.

              To the extent a notice or other communication to the beneficial
       owners of the Floating Rate Notes is required under the Indenture, unless
       and until Certificated Securities shall have been issued to such owners,
       the Trustee shall give all such notices and communications specified
       herein to be given to such owners to the Depository, and shall have no
       obligations to such Owners.

              (c) CERTIFICATED SECURITIES. Floating Rate Series A Notes sold to
       Institutional Accredited Investors shall be issued initially in the form
       of a fully registered, certificated

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       Floating Rate Series A Note ("Certificated Securities"). Except as
       provided in this Section 2.05, owners of beneficial interests in Global
       Securities shall not be entitled to receive physical delivery of
       Certificated Securities.

       Global Securities shall be exchangeable for Certificated Securities if
(i) the Depository (x) notifies the Company that it is unwilling or unable to
continue as Depository for the Global Securities or (y) shall no longer be
registered or in good standing under the Exchange Act, or other applicable
statute or regulation, and a successor Depository for the Global Securities is
not appointed by the Company within 90 days after the Company receives such
notice or becomes aware of such condition. Upon surrender to the Trustee of the
typewritten certificate or certificates representing the Global Securities by
the Depository, accompanied by registration instructions, the Trustee shall
execute and authenticate the certificates in accordance with the instructions of
the Depository. Neither the Security Registrar nor the Trustee shall be liable
for any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of
Certificated Securities, the Trustee shall recognize the Holders of the
Certificated Securities as Holders. The Certificated Securities shall be
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Company, as evidenced by the execution thereof by
the Company, and shall bear the legend set forth on Exhibit A hereto unless the
Company informs the Trustee that such legend is no longer required.

              SECTION 2.07. FORM OF SECURITIES.

              The Global Securities and Certificated Securities shall be
substantially in the form attached as Exhibit A thereto.

              SECTION 2.08. TRANSFER AND EXCHANGE.

              (a) GENERAL. The Floating Rate Notes may not be transferred except
       in compliance with the legend contained in Exhibit A unless otherwise
       determined by the Company in accordance with applicable law. No service
       charge will be made for any transfer or exchange of Floating Rate Notes,
       but payment will be required of a sum sufficient to cover any tax or
       other governmental charge that may be imposed in connection therewith.

              (b) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES.

                     (i)    If a holder of a beneficial interest in the Rule
              144A Global Security wishes at any time to exchange its interest
              in the Rule 144A Global Security for an interest in the Permanent
              Regulation S Global Security, or to transfer its interest in the
              Rule 144A Global Security to a person who wishes to take delivery
              thereof in the form of an interest in the Permanent Regulation S
              Global Security, such holder may, subject to the rules and
              procedures of the Depository and to the requirements set forth in
              the following sentence, exchange or cause the exchange or transfer
              or cause the transfer of such interest for an equivalent
              beneficial interest in the Permanent Regulation S Global Security.
              Upon receipt by the Trustee, as transfer agent, of (1)
              instructions given in accordance with the

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              Depository's procedures from or on behalf of a holder of a
              beneficial interest in the Rule 144A Global Security, directing
              the Trustee, as transfer agent, to credit or cause to be credited
              a beneficial interest in the Permanent Regulation S Global
              Security in an amount equal to the beneficial interest in the Rule
              144A Global Security to be exchanged or transferred, (2) a written
              order given in accordance with the Depository's procedures
              containing information regarding the Euroclear or Clearstream
              account to be credited with such increase and the name of such
              account, and (3) a certificate in the form of Exhibit C hereto
              given by the holder of such beneficial interest stating that the
              exchange or transfer of such interest has been made pursuant to
              and in accordance with Rule 903 or Rule 904 of Regulation S under
              the Securities Act, the Trustee, as transfer agent, shall promptly
              deliver appropriate instructions to the Depository, its nominee,
              or the custodian for the Depository, as the case may be, to reduce
              or reflect on its records a reduction of the Rule 144A Global
              Security by the aggregate principal amount of the beneficial
              interest in such Rule 144A Global Security to be so exchanged or
              transferred from the relevant participant, and the Trustee, as
              transfer agent, shall promptly deliver appropriate instructions to
              the Depository, its nominee, or the custodian for the Depository,
              as the case may be, concurrently with such reduction, to increase
              or reflect on its records an increase of the principal amount of
              such Permanent Regulation S Global Security by the aggregate
              principal amount of the beneficial interest in such Rule 144A
              Global Security to be so exchanged or transferred, and to credit
              or cause to be credited to the account of the person specified in
              such instructions (who may be Euroclear or Clearstream or another
              agent member of Euroclear or Clearstream or both, as the case may
              be, acting for and on behalf of them) a beneficial interest in
              such Permanent Regulation S Global Security equal to the reduction
              in the principal amount of such Rule 144A Global Security.

                     (ii)   If a holder of a beneficial interest in the
              Permanent Regulation S Global Security wishes at any time to
              exchange its interest in the Permanent Regulation S Global
              Security for an interest in the Rule 144A Global Security, or to
              transfer its interest in the Permanent Regulation S Global
              Security to a person who wishes to take delivery thereof in the
              form of an interest in the Rule 144A Global Security, such holder
              may, subject to the rules and procedures of Euroclear or
              Clearstream and the Depository, as the case may be, and to the
              requirements set forth in the following sentence, exchange or
              cause the exchange or transfer or cause the transfer of such
              interest for an equivalent beneficial interest in such Rule 144A
              Global Security. Upon receipt by the Trustee, as transfer agent,
              of (1) instructions given in accordance with the procedures of
              Euroclear or Clearstream and the Depository, as the case may be,
              from or on behalf of a beneficial owner of an interest in the
              Permanent Regulation S Global Security directing the Trustee, as
              transfer agent, to credit or cause to be credited a beneficial
              interest in the Rule 144A Global Security in an amount equal to
              the beneficial interest in the Permanent Regulation S Global
              Security to be exchanged or transferred, (2) a written order given
              in accordance with the procedures of Euroclear or Clearstream and
              the Depository, as the case may be, containing information
              regarding the account with the Depository to be credited with such
              increase and the name of

                                       11
<PAGE>

              such account, and (3) prior to the expiration of the Distribution
              Compliance Period, a certificate in the form of Exhibit C hereto
              given by the holder of such beneficial interest and stating that
              the person transferring such interest in such Permanent Regulation
              S Global Security reasonably believes that the person acquiring
              such interest in the Rule 144A Global Security is a QIB and is
              obtaining such beneficial interest for its own account or the
              account of a QIB in a transaction meeting the requirements of Rule
              144A and any applicable securities laws of any state of the United
              States or any other jurisdiction, the Trustee, as transfer agent,
              shall promptly deliver appropriate instructions to the Depository,
              its nominee, or the custodian for the Depository, as the case may
              be, to reduce or reflect on its records a reduction of the
              Permanent Regulation S Global Security by the aggregate principal
              amount of the beneficial interest in such Permanent Regulation S
              Global Security to be exchanged or transferred, and the Trustee,
              as transfer agent, shall promptly deliver appropriate instructions
              to the Depository, its nominee, or the custodian for the
              Depository, as the case may be, concurrently with such reduction,
              to increase or reflect on its records an increase of the principal
              amount of the Rule 144A Global Security by the aggregate principal
              amount of the beneficial interest in the Permanent Regulation S
              Global Security to be so exchanged or transferred, and to credit
              or cause to be credited to the account of the person specified in
              such instructions a beneficial interest in the Rule 144A Global
              Security equal to the reduction in the principal amount of the
              Permanent Regulation S Global Security. After the expiration of
              the Distribution Compliance Period, the certification requirement
              set forth in clause (3) of the second sentence of this Section
              2.07(b)(ii) will no longer apply to such exchanges and transfers.

                     (iii)  Any beneficial interest in one of the Global
              Securities that is transferred to a person who takes delivery in
              the form of an interest in the other Global Securities will, upon
              transfer, cease to be an interest in such Global Security and
              become an interest in the other Global Securities and,
              accordingly, will thereafter be subject to all transfer
              restrictions and other procedures applicable to beneficial
              interests in such other Global Security Note for as long as it
              remains such an interest.

                     (iv)   Beneficial interests in Temporary Regulation S
              Global Securities may be exchanged for interests in Rule 144A
              Global Securities or Permanent Regulation S Global Securities if
              (1) such exchange occurs in connection with a transfer of
              securities in compliance with Rule 144A, and (2) the transferor of
              the beneficial interest in the Temporary Regulation S Global
              Security first delivers to the Trustee a written certificate (in a
              form satisfactory to the Trustee) to the effect that the
              beneficial interest in the Temporary Regulation S Global Security
              is being transferred to a Person (a) who the transferor reasonably
              believes to be a QIB (b) purchasing for its own account or the
              account of a QIB in a transaction meeting the requirements of Rule
              144A, and (c) in accordance with all applicable securities laws of
              the states of the United States and other jurisdictions.

                                       12

<PAGE>

                     (v)    During the Distribution Compliance Period,
              beneficial ownership interests in Temporary Regulation S Global
              Securities may only be sold, pledged or transferred through
              Euroclear or Clearstream in accordance with the applicable
              procedures relating to such institutions and only (i) to the
              Company, (ii) so long as such security is eligible for resale
              pursuant to Rule 144A, to a Person whom the selling holder
              reasonably believes is a QIB that purchases for its own account or
              for the account of a QIB in a transaction meeting the requirements
              of Rule 144A, (iii) in an offshore transaction in accordance with
              Regulation S (other than a transaction resulting in an exchange
              for interest in a Permanent Regulation S Global Security), (iv)
              pursuant to an exemption from registration under the Securities
              Act provided by Rule 144 (if applicable) under the Securities Act
              or (v) pursuant to an effective registration statement under the
              Securities Act, in each case in accordance with any applicable
              securities laws of any state of the United States.

              (c) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES AND CERTIFICATED
              SECURITIES.

                     (i)    In the event that a Global Security is exchanged for
              a Certificated Security as provided in Section 2.06(c), such
              Certificated Security may be exchanged or transferred for one
              another, subject to Section 2.05 of the Original Indenture, only
              in accordance with such procedures as are substantially consistent
              with the provisions of clauses (b)(i) and (ii) above (including
              the certification requirements intended to ensure that such
              exchanges or transfers comply with Rule 144, Rule 144A or
              Regulation S, as the case may be) and as may be from time to time
              reasonably adopted by the Company.

                     (ii)   Upon receipt by the Trustee of a Certificated
              Security, duly endorsed or accompanied by appropriate instruments
              of transfer, the Trustee shall cancel such Certificated Security
              and cause, or direct the Securities Custodian to cause, in
              accordance with the standing instructions and procedures existing
              of the Depository and the Securities Custodian, the aggregate
              principal amount of Floating Rate Notes represented by the Rule
              144A Global Security or Permanent Regulation S Global Security, as
              applicable, to be increased by the aggregate principal amount of
              the Certificated Security to be exchanged and shall credit or
              cause to be credited to the account of the Person specified in
              such instructions a beneficial interest in the Rule 144A Global
              Security or Permanent Regulation S Global Security, as applicable,
              equal to the principal amount of the Certificated Security so
              canceled. If no Rule 144A Global Securities or Permanent
              Regulation S Global Securities, as applicable, are then
              outstanding, the Company shall issue and the Trustee shall
              authenticate, upon written order of the Company in the form of an
              Officers' Certificate, a new Rule 144A Global Security or
              Permanent Regulation S Global Security, as applicable, in the
              appropriate principal amount.

              (d) CERTIFICATES. In connection with any transfer described in
       paragraphs (b) and (c) of this Section 2.07, the Trustee shall receive a
       certificate of transfer in the form attached as Exhibit C hereto.
       Additionally, upon any transfer or exchange to an

                                       13

<PAGE>

       Institutional Accredited Investor, the Company and the Trustee shall
       receive a certificate in the form attached as Exhibit D hereto.

              (e) TRANSFER RESTRICTED SECURITY. Upon any sale or transfer of a
       Transfer Restricted Security (including any Transfer Restricted Security
       represented by a Global Security) pursuant to Rule 144 under the
       Securities Act or an effective registration statement under the
       Securities Act, which shall be certified to the Trustee and Security
       Registrar upon which each may conclusively rely:

                     (i)    in the case of any Transfer Restricted Security
              represented by a Certificated Security, the Security Registrar
              shall permit the Holder thereof to exchange such Transfer
              Restricted Security for a Certificated Security that does not bear
              the legend set forth in Exhibit A hereto and rescind any
              restriction on the transfer of such Transfer Restricted Security;
              and

                     (ii)   in the case of any Transfer Restricted Security
              represented by a Global Security, such Transfer Restricted
              Security shall not be required to bear the legend set forth in
              Exhibit A hereto if all other interests in such Global Note have
              been or are concurrently being sold or transferred pursuant to
              Rule 144 under the Securities Act or pursuant to an effective
              registration statement under the Securities Act.

              (f) REGISTERED EXCHANGE OFFER. Notwithstanding the foregoing, upon
       consummation of the Registered Exchange Offer, the Company shall issue
       and, upon receipt of a Company Order in accordance with Section 2.05 of
       the Original Indenture, the Trustee shall authenticate Floating Rate
       Series B Notes in exchange for Floating Rate Series A Notes accepted for
       exchange in the Registered Exchange Offer, which Floating Rate Series B
       Notes shall not bear the transfer restriction legend set forth in Exhibit
       A hereto and shall not provide for Special Interest Premium and the
       Security Registrar shall rescind any restriction on the transfer of such
       Floating Rate Series B Notes, in each case unless the Holder of such
       Floating Rate Series A Notes (A) is a broker-dealer tendering Floating
       Rate Series A Notes acquired directly from the Company or an "affiliate"
       (as defined in Rule 144 under the Securities Act) of the Company for its
       own account, (B) is a Person who has an arrangement or understanding with
       any Person to participate in the "distribution" (within the meaning of
       the Securities Act) of the Floating Rate Series B Notes, (C) is a Person
       who is an "affiliate" (as defined in Rule 144 under the Securities Act)
       of the Company or (D) will not be acquiring the Floating Rate Series B
       Notes in the ordinary course of such Holder's business. The Company shall
       identify to the Trustee such Holders in a written certification signed by
       an Officer of the Company and, absent certification from the Company to
       such effect, the Trustee shall assume that there are no such Holders.

                                       14

<PAGE>

                                  ARTICLE III

                            MISCELLANEOUS PROVISIONS

              SECTION 3.01. RECITALS BY COMPANY.

              The recitals in this Fourth 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 Floating Rate Notes and
of this Fourth Supplemental Indenture as fully and with like effect as if set
forth herein in full.

              SECTION 3.02. 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 Fourth Supplemental
Indenture shall be read, taken and construed as one and the same instrument.

              SECTION 3.03. EXECUTED IN COUNTERPARTS.

              This Fourth Supplemental Indenture may be simultaneously 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 3.04. LEGENDS.

              Except as determined by the Company in accordance with applicable
law, each 2013 Note shall bear the applicable legends relating to restrictions
on transfer pursuant to the securities laws in substantially the form set forth
on Exhibit A hereto.

              SECTION 3.05. APPLICABILITY OF SECTION 4.05 AND ARTICLE TEN OF
                            ORIGINAL INDENTURE.

              As long as the Floating Rate Notes are outstanding, Section 4.05
and Article Ten of the Original Indenture shall be applicable thereto; provided,
however, that if the Company's generation-related assets ("Generation-Related
Business") are transferred or sold (whether or not the Generation-Related
Business constitutes "substantially all" of the Company's total assets), the
Floating Rate Notes will continue to be obligations of the Company.

                                       15

<PAGE>

              IN WITNESS WHEREOF, each party hereto has caused this instrument
to be signed in its name and behalf by its duly authorized signatories, all as
of the day and year first above written.

                                                     AEP TEXAS CENTRAL COMPANY

                                                     By_/s/ Susan Tomasky_
                                                        Vice President
Attest:

By_/s/ T. G. Berkemeyer
    Assistant Secretary

                                                     BANK ONE, N. A.,
                                                     as Trustee

                                                     By_/s/ Jeffery L. Eubank__
                                                        Vice President

Attest:

By_/s/ David B. Knox__
    Trust Officer

<PAGE>

                                    EXHIBIT A

                            FORM OF SERIES [A/B] NOTE

                                                     [Rule 144A Global Security]
                                                  [Regulation S Global Security]
                                                         [Certificated Security]

                       [FORM OF FACE OF INITIAL SECURITY]

                           [Global Securities Legend]

              UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

              TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OR PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.

              [FOR REGULATION S GLOBAL NOTE ONLY] UNTIL 40 DAYS AFTER THE
COMMENCEMENT OF THE OFFERING, AN OFFER OR SALE OF NOTES WITHIN THE UNITED STATES
BY A DEALER (AS DEFINED IN THE U.S. SECURITIES ACT) MAY VIOLATE THE REGISTRATION
REQUIREMENTS OF THE U.S. SECURITIES ACT IF SUCH OFFER OR SALE IS MADE OTHERWISE
THAN IN ACCORDANCE WITH RULE 144A THEREUNDER.

                         [Restricted Securities Legend]

              THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE
RESOLD, PLEDGED OR OTHERWISE

                                    Ex. A-1

<PAGE>

TRANSFERRED OTHER THAN (A)(1) TO THE COMPANY, (2) IN A TRANSACTION ENTITLED TO
AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT,
(3) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER
THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (4) OUTSIDE THE UNITED STATES IN A TRANSACTION
MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT, (5) IN
ACCORDANCE WITH ANOTHER APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY) OR (6) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT AND (B) IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF EACH STATE OF THE UNITED STATES. AN INSTITUTIONAL
ACCREDITED INVESTOR HOLDING THIS SECURITY AGREES IT WILL FURNISH TO THE COMPANY
AND THE TRUSTEE SUCH CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASONABLY
REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE
FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR (2) AN INSTITUTION THAT
IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(A)(1), (2),(3) OR (7) UNDER
THE SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES
AND NOT FOR DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT.

                 [Temporary Regulation S Global Security Legend]

              EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTEREST IN THIS
TEMPORARY REGULATION S GLOBAL SECURITY WILL NOT BE EXCHANGEABLE FOR INTERESTS IN
THE PERMANENT REGULATION S GLOBAL SECURITY OR ANY OTHER SECURITY REPRESENTING AN
INTEREST IN THE SECURITIES REPRESENTED HEREBY WHICH DO NOT CONTAIN A LEGEND
CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF THE "40-DAY
DISTRIBUTION COMPLIANCE PERIOD" (WITHIN THE MEANING OF RULE 903(d)(3) OF
REGULATION S UNDER THE SECURITIES ACT) AND THEN ONLY UPON CERTIFICATION IN FORM
REASONABLY SATISFACTORY TO THE TRUSTEE THAT SUCH BENEFICIAL INTERESTS ARE OWNED
EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO PURCHASED SUCH INTERESTS IN A
TRANSACTION THAT DID NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT. DURING
SUCH 40-DAY DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL OWNERSHIP INTEREST IN
THIS TEMPORARY REGULATION S GLOBAL SECURITY MAY ONLY BE SOLD, PLEDGED OR
TRANSFERRED THROUGH EUROCLEAR BANK S.A./N.A., AS OPERATOR OF THE EUROCLEAR
SYSTEM OR CLEARSTREAM BANKING, SOCIETE ANONYME AND

                                    Ex. A-2

<PAGE>

ONLY (I) TO THE COMPANY, (II) IN THE UNITED STATES TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A
, (III) OUTSIDE THE UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904
UNDER THE SECURITIES ACT, OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASE (I) THROUGH (IV) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. HOLDERS OF INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY WILL
NOTIFY ANY PURCHASER OF THIS SECURITY OF THE RESALE RESTRICTIONS REFERRED TO
ABOVE, IF THEN APPLICABLE.

              BENEFICIAL INTERESTS IN THIS TEMPORARY REGULATIONS S GLOBAL
SECURITY MAY BE EXCHANGED FOR INTEREST IN A RULE 144A GLOBAL SECURITY ONLY IF
(1) SUCH EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER OF THE NOTES IN
COMPLIANCE WITH RULE 144A, AND (2) THE TRANSFEROR OF THE REGULATION S GLOBAL
SECURITY FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM
ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT THE REGULATION S GLOBAL
SECURITY BEING TRANSFERRED TO A PERSON (A) WHO THE TRANSFEROR REASONABLY
BELIEVES TO BE A QUALIFIED INSTITUTIONAL BUYER WHEN THE MEANING OF RULE 144A (B)
PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, AND (C) IN ACCORDANCE
WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER
JURISDICTIONS.

              BENEFICIAL INTEREST IN A RULE 144A GLOBAL SECURITY MAY BE
TRANSFERRED TO A PERSON WHO TAKES DELIVERY IN THE FORM OF AN INTEREST IN THE
REGULATION S GLOBAL SECURITY, WHETHER BEFORE OR AFTER THE EXPIRATION OF THE
40-DAY DISTRIBUTION COMPLIANCE PERIOD, ONLY IF THE TRANSFEROR FIRST DELIVERS TO
THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO
THE EFFECT THAT IF SUCH TRANSFER IS BEING MADE IN ACCORDANCE WITH RULE 903 OR
904 OF REGULATION S OR RULE 144 (IF AVAILABLE) AND THAT, IF SUCH TRANSFER OCCURS
PRIOR TO THE EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD, THE
INTEREST TRANSFERRED WILL BE HELD IMMEDIATELY THEREAFTER THROUGH EUROCLEAR BANK
S.A./N.A. OR CLEARSTREAM BANKING SOCIETE ANONYME.

                        [Certificated Securities Legend]

              IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.

                                    Ex. A-3

<PAGE>

                            AEP TEXAS CENTRAL COMPANY
                              Floating Rate Notes,
                                Series [A/B] due
                                      2005

CUSIP:[0010EPAK4/144A][U00804AD3/Reg S]  Original Issue Date:  February 18, 2003

Stated Maturity:  February 15, 2005

Principal Amount: $100,000,000 (or such other amount as is indicated on
                                Schedule A)

Redeemable:                Yes                       No       X
In Whole:                  Yes                       No       X
In Part:                   Yes                       No       X

              AEP TEXAS CENTRAL COMPANY, a corporation duly organized and
existing under the laws of the State of Texas (herein referred to as the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
[________] or registered assigns, the principal sum of _____ DOLLARS ($_____)
[or such other amount as is indicated on Schedule A hereto]* on the Stated
Maturity specified above (or upon earlier redemption); and to pay interest on
said Principal Amount from the Original Issue Date specified above or from the
most recent interest payment date (each such date, an "Interest Payment Date")
to which interest has been paid or duly provided for, quarterly in arrears on
February 15, May 15, August 15 and November 15 in each year, commencing on May
15, 2003, at the per annum interest rate determined by the Calculation Agent on
each Interest Determination Date, as such terms are defined herein, until the
Principal Amount shall have been paid or duly provided for. The amount of
interest payable on any Interest Payment Date shall be computed on the basis of
the actual number of days for which interest is payable in the relevant Interest
Period, divided by 360.

              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 fifteenth calendar day before each Interest Payment Date (the "Regular
Record Date"), provided that interest payable on the Stated Maturity shall be
paid to the Person to whom principal is paid. Any such interest not so
punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date and shall be paid as provided in said
Indenture.

              If any Interest Payment Date (other than at the Stated Maturity)
is not a Business Day, then such Interest Payment Date shall be the next
succeeding Business Day, except that if such Business Day is in the next
calendar month, such Interest Payment Date shall be the

------------
*     Insert in the Rule 144A Global Security and the Regulation S
      Global Security only.

                                    Ex. A-4

<PAGE>

immediately preceding Business Day. If the Stated Maturity of this Note falls on
day that is not a Business Day, the payment of principal and interest will be
made on the next succeeding Business Day, and no interest shall accrue on such
amounts for the period from and after such Stated Maturity. The principal of and
the interest on this Note shall be payable at the office or agency of the
Company maintained for that purpose in the Borough of Manhattan, the City of New
York, New York, in any coin or currency of the United States of America which at
the time of payment is legal tender for payment of public and private debts;
provided, however, that payment of interest (other than interest payable on the
Stated Maturity) may be made at the option of the Company by check mailed to the
registered holder at such address as shall appear in the Security Register or by
wire transfer to the account designated by the person entitled thereto.

              This Note is one of a duly authorized series of Notes of the
Company (herein sometimes referred to as the "Notes"), specified in the
Indenture (defined below), all issued or to be issued in one or more series
under and pursuant to an Indenture dated as of February 1, 2003 duly executed
and delivered between the Company and Bank One, N. A., a national banking
association organized and existing under the laws of the United States, as
Trustee (herein referred to as the "Trustee") (such Indenture, as originally
executed and delivered and as thereafter supplemented and amended being
hereinafter referred to as the "Indenture"), to which Indenture and all
indentures supplemental thereto reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and the holders of the Notes. By the terms of the
Indenture, the Notes are issuable in series which may vary as to amount, date of
maturity, rate of interest and in other respects as in the Indenture provided.
This Note is one of the series of Notes designated on the face hereof as
Floating Rate Notes, Series [A/B] due 2005 initially issued in the aggregate
principal amount of $100,000,000.

              This Note may not be redeemed prior to its maturity.

              This Note will bear interest at a per annum rate ("Interest Rate")
determined by the Calculation Agent, subject to the maximum interest rate
permitted by New York or other applicable state law, as such law may be modified
by United States law of general application. The Interest Rate for each Interest
Period will be equal to LIBOR on the Interest Determination Date for such
Interest Period plus 1.25%; provided, however, that in certain circumstances
described below, the Interest Rate will be determined without reference to
LIBOR. Promptly upon such determination, the Calculation Agent will notify the
Trustee for the Notes, if the Trustee is not then serving as the Calculation
Agent, of the Interest Rate for the new Interest Period. The Interest Rate
determined by the Calculation Agent, absent manifest error, shall be binding and
conclusive upon the beneficial owners and holders of this Note, the Company and
the Trustee for the Notes.

       Interest on this Note will accrue from and including the Original
Issue Date specified above to, but excluding, May 15, 2003, and thereafter, from
and including each Interest Payment Date to, but excluding, the next succeeding
Interest Payment Date or Stated Maturity, as the case may be.

                                    Ex. A-5

<PAGE>
              If the following circumstances exist on any Interest Determination
Date, the Calculation Agent shall determine the Interest Rate for the Notes as
follows:

              (1)    In the event no Reported Rate (as defined below) appears on
Telerate Page 3750 (as defined below) as of approximately 11:00 a.m. London time
on an Interest Determination Date, the Calculation Agent shall request the
principal London offices of each of four major banks in the London interbank
market selected by the Calculation Agent (after consultation with the Company)
to provide a quotation of the rate (the "Rate Quotation") at which three month
deposits in amounts of not less than $1,000,000 are offered by it to prime banks
in the London interbank market, as of approximately 11:00 a.m. on such Interest
Determination Date, that is representative of single transactions at such time
(the "Representative Amounts"). If at least two rate Quotations are provided,
the interest rate will be the arithmetic mean of the Rate Quotations obtained by
the Calculation Agent, plus 1.25%.

              (2)    In the event no Reported Rate appears on Telerate Page 3750
as of approximately 11:00 a.m. London time on an Interest Determination Date and
there are fewer than two Rate Quotations, the interest rate will be the
arithmetic mean of the rates quoted at approximately 11:00 a.m. New York City
time on such Interest Determination Date, by three major banks in New York City
selected by the Calculation Agent (after consultation with the Company), for
loans in Representative Amounts in U.S. dollars to leading European banks,
having an index maturity of three months for a period commencing on the second
London Business Day immediately following such Interest Determination Date, plus
1.25 %; provided, however, that if fewer than three banks selected by the
Calculation Agent are quoting such rates, the interest rate for the applicable
Interest Period will be the same as the interest rate in effect for the
immediately preceding Interest Period.

              "Business Day" means, with respect to this Note, any day that is
not a day on which banking institutions in New York City are authorized or
required by law or regulation to close.

              "Calculation Agent" means Bank One, N.A., or its successor
appointed by the Company, acting as calculation agent.

              "Interest Determination Date" means the second London Business Day
immediately preceding the first day of the relevant Interest Period.

              "Interest Period" means the period commencing on the Interest
Payment Date (or commencing on the Original Issue Date, if no interest has been
paid or duly made available for payment since that date) and ending on the day
before the next succeeding Interest Payment Date.

              "LIBOR" for any Interest Determination Date will be the offered
rate for deposits in U.S. dollars having an index maturity of three months for a
period commencing on the second London Business Day immediately following the
Interest Determination Date in amounts of not less than $1,000,000, as such rate
appears on Telerate Page 3750 or a successor reporter of such rates selected by
the Calculation Agent and acceptable to the Company, at approximately 11:00 a.m.
London time on the Interest Determination Date (the "Reported Rate").

                                    Ex. A-6

<PAGE>

              "London Business Day" means a day other than a Saturday or Sunday
that is not a day on which banking institutions in London, England and New York,
New York are authorized or obligated by law or executive order to be closed and
on a day on which dealings in deposits in U.S. dollars are transacted, or with
respect to any future date are expected to be transacted, in the London
interbank market.

              "Telerate Page 3750" means the display designated on page 3750 on
Dow Jones Markets Limited (or such other page as may replace the 3750 page on
that service or such other service as may be nominated by the British Bankers'
Association for the purpose of displaying London interbank offered rates for
U.S. dollar deposits).

              Upon request, the Calculation Agent will provide the current
Interest Rate and, if determined, the Interest Rate which will become effective
for the next Interest Period.

              The accrued interest for any period is calculated by multiplying
the Principal Amount by an accrued interest factor. The accrued interest factor
is computed by adding the interest factor calculated for each day in the period
to the date for which accrued interest is being calculated. The interest factor
(expressed as a decimal rounded upwards if necessary) is computed by dividing
the interest rate (expressed as a decimal rounded upwards if necessary)
applicable to such date by 360.

              All percentages resulting from any calculation of the Interest
Rate will be rounded, if necessary, to the nearest one-hundred thousandth of a
percentage point, with five one-millionths of a percentage point rounded
upwards, and all dollar amounts used in or resulting from such calculation will
be rounded to the nearest cent (with one-half cent being rounded upwards).

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

              The Indenture contains provisions for defeasance at any time of
the entire indebtedness of this Note upon compliance by the Company with certain
conditions set forth therein. This Note will not have a sinking fund.

              As described in the supplemental indenture relating to the Notes,
so long as this Note is outstanding, the Company is subject to a limitation on
issuance of Secured Debt as described therein.

              The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Notes of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Notes; provided,
however, that no such supplemental indenture shall (i) extend the fixed maturity
of any Notes of any series, or reduce the principal amount thereof, or reduce
the rate or extend the time of payment of interest thereon,

                                    Ex. A-7

<PAGE>

or reduce any premium payable upon the redemption thereof, or reduce the amount
of the principal of a Discount Security that would be due and payable upon a
declaration of acceleration of the maturity thereof pursuant to the Indenture,
without the consent of the holder of each Note then outstanding and affected;
(ii) reduce the aforesaid percentage of Notes, the holders of which are required
to consent to any such supplemental indenture, or reduce the percentage of
Notes, the holders of which are required to waive any default and its
consequences, without the consent of the holder of each Note then outstanding
and affected thereby; or (iii) modify any provision of Section 6.01(c) of the
Indenture (except to increase the percentage of principal amount of securities
required to rescind and annul any declaration of amounts due and payable under
the Notes), without the consent of the holder of each Note then outstanding and
affected thereby. The Indenture also contains provisions permitting the Holders
of a majority in aggregate principal amount of the Notes of all series at the
time outstanding affected thereby, on behalf of the Holders of the Notes of such
series, to waive any past default in the performance of any of the covenants
contained in the Indenture, or established pursuant to the Indenture with
respect to such series, and its consequences, except a default in the payment of
the principal of or premium, if any, or interest on any of the Notes of such
series. Any such consent or waiver by the registered Holder of this Note (unless
revoked as provided in the Indenture) shall be conclusive and binding upon such
Holder and upon all future Holders and owners of this Note and of any Note
issued in exchange herefor or in place hereof (whether by registration or
transfer or otherwise), irrespective of whether or not any notation of such
consent or waiver is made upon this Note.

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

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

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

                                    Ex. A-8

<PAGE>

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

              The Notes of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof
except that a Note issued to an Institutional Accredited Investor will be in
denominations of at $250,000. As provided in the Indenture and subject to
certain limitations, Notes of this series are exchangeable for a like aggregate
principal amount of Notes of this series of a different authorized denomination,
as requested by the Holder surrendering the same.

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

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

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

                                     AEP TEXAS CENTRAL COMPANY

                                     By:  ______________________________________

Attest:

By:  ____________________________

                                     Ex. A-9

<PAGE>

                                  ABBREVIATIONS

       The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM-   as tenants in       UNIF GIFT MIN ACT-_______  Custodian ________
           common                                          (Cust)        (Minor)
TEN ENT-   as tenants by the                        under Uniform Gifts to
           entireties                               Minors Act
JT TEN-    As joint tenants
           with right of                            ________________________
           survivorship and                                  (State)
           not as tenants in
           common

                    Additional abbreviations may also be used
                          though not on the above list.

       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 Note and all rights thereunder, hereby irrevocably constituting and
appointing

________________________________________________________________________________
agent to transfer said 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.

                                    Ex. A-10

<PAGE>

       In connection with any transfer of any of the Floating Rate Series A
Notes evidenced by this certificate, the undersigned confirms that such Floating
Rate Series A Notes are being:

CHECK ONE BOX BELOW

       (1)[ ] exchanged for the undersigned's own account without transfer; or

       (2)[ ] transferred to a person whom the undersigned reasonably believes
              to be a "qualified institutional buyer" as defined in Rule 144A
              under the Securities Act of 1933 who is purchasing such Floating
              Rate Series A Notes for such buyer's own account or the account of
              a "qualified institutional buyer" in a transaction meeting the
              requirements of Rule 144A under the Securities Act of 1933 and any
              applicable securities laws of any state of the United States or
              any other jurisdiction; or

       (3)[ ] exchanged or transferred pursuant to and in compliance with Rule
              903 or 904 of Regulation S under the Securities Act of 1933; or

       (4)[ ] exchanged or transferred to an institutional "accredited investor"
              within the meaning of Rule 501(a)(1), (2), (3) or (7) of
              Regulation D under the Securities Act pursuant to Rule 144A (and
              based upon an opinion of counsel if the Company or the Trustee so
              requests) and, to the knowledge of the transferor of the Floating
              Rate Series A Notes, such institutional accredited investor to
              whom such Note is to be transferred is not an "affiliate" (as
              defined in Rule 144 under the Securities Act) of the Company; or

       (5)[ ] transferred pursuant to another available exemption from the
              registration requirements of the Securities Act of 1933.

       Unless one of the boxes is checked, the Trustee will refuse to register
any of the Floating Rate Series A Notes evidenced by this certificate in the
name of any person other than the registered Holder thereof; PROVIDED, HOWEVER,
that if box (3), (4) or (5) is checked, the Company may require, prior to
registering any such transfer of the Floating Rate Series A Notes, such legal
opinions, certifications and other information as the Company has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act of 1933, such as the exemption provided by Rule 144 under such
Act; PROVIDED, FURTHER, that if box (2) is checked, the transferee must also
certify that it is a qualified institutional buyer as defined in Rule 144A.

                                        ----------------------------------------
                                                        Signature

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

                                    Ex. A-11

<PAGE>

              TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.

       The undersigned represents and warrants that it is purchasing this
Floating Rate Series A Note for its own account or an account with respect to
which it exercises sole investment discretion and that it and any such account
is a "qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.

Date: _________________

_______________________

                 NOTICE: TO BE EXECUTED BY AN EXECUTIVE OFFICER.

                                    Ex. A-12

<PAGE>

                                   SCHEDULE A

       The initial aggregate principal amount of Floating Rate Series A Notes
evidenced by the Certificate to which this Schedule is attached is $___________.
The notations on the following table evidence decreases and increases in the
aggregate principal amount of Floating Rate Series A Notes evidenced by such
Certificate.

                                             Principal Amount of
  Decrease in                               Floating Rate Series A
Principal Amount   Increase in Principal     Notes Remaining After   Notation by
of Floating Rate  Amount of Floating Rate       Such Decrease or      Security
 Series A Notes       Series A Notes                Increase          Registrar
----------------  -----------------------   ----------------------   -----------

                                    Ex. A-13

<PAGE>

                                    EXHIBIT B

                          CERTIFICATE OF AUTHENTICATION

       This is one of the Notes referred to in the within-mentioned Indenture.

                                            BANK ONE, N. A.,
                                            as Trustee

                                            By: ________________________________
                                                     Authorized Signatory

                                    Ex. B-1

<PAGE>

                                    EXHIBIT C

                          FORM OF TRANSFER CERTIFICATE

       In connection with any transfer of any of the Floating Rate Series A
Notes evidenced by this certificate, the undersigned confirms that such Floating
Rate Series A Notes are being:

CHECK ONE BOX BELOW

       (1)[ ] exchanged for the undersigned's own account without transfer; or

       (2)[ ] transferred to a person whom the undersigned reasonably believes
              to be a "qualified institutional buyer" as defined in Rule 144A
              under the Securities Act of 1933 who is purchasing such Floating
              Rate Series A Notes for such buyer's own account or the account of
              a "qualified institutional buyer" in a transaction meeting the
              requirements of Rule 144A under the Securities Act of 1933 and any
              applicable securities laws of any state of the United States or
              any other jurisdiction; or

       (3)[ ] exchanged or transferred pursuant to and in compliance with Rule
              903 or 904 of Regulation S under the Securities Act of 1933; or

       (4)[ ] exchanged or transferred to an institutional "accredited investor"
              within the meaning of Rule 501(a)(1), (2), (3) or (7) of
              Regulation D under the Securities Act pursuant to Rule 144A (and
              based upon an opinion of counsel if the Company or the Trustee so
              requests) and, to the knowledge of the transferor of the Floating
              Rate Series A Notes, such institutional accredited investor to
              whom such Note is to be transferred is not an "affiliate" (as
              defined in Rule 144 under the Securities Act) of the Company; or

       (5)[ ] transferred pursuant to another available exemption from the
              registration requirements of the Securities Act of 1933.

       Unless one of the boxes is checked, the Trustee will refuse to register
any of the Floating Rate Series A Notes evidenced by this certificate in the
name of any person other than the registered Holder thereof; PROVIDED, HOWEVER,
that if box (3) or (4) is checked, the Company may require, prior to registering
any such transfer of the Floating Rate Series A Notes, such legal opinions,
certifications and other information as the Company has reasonably requested to
confirm that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act
of 1933, such as the exemption provided by Rule 144 under such Act; PROVIDED,
FURTHER, that if box (2) is checked, the transferee must also certify that it is
a qualified institutional buyer as defined in Rule 144A.

                                   ________________________________________
                                                   Signature

                                    Ex. C-1

<PAGE>

              TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.

       The undersigned represents and warrants that it is purchasing this
Floating Rate Series A Note for its own account or an account with respect to
which it exercises sole investment discretion and that it and any such account
is a "qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.

Date: _______________

_____________________

                 NOTICE: TO BE EXECUTED BY AN EXECUTIVE OFFICER.

                                    Ex. C-2

<PAGE>

                                    EXHIBIT D

                        FORM OF LETTER TO BE DELIVERED BY
                       INSTITUTIONAL ACCREDITED INVESTORS

Ladies and Gentlemen:

       In connection with our proposed purchase of the Floating Rate Notes,
Series A due 2005 (the Notes) issued by AEP Texas Central Company, a Texas
corporation (Issuer), we confirm that:

       1.     We are purchasing the Notes for our own account, or for one or
              more investor accounts for which we are acting as a fiduciary or
              agent, in each case for investment, and not with a view to, or for
              offer or sale in connection with, any distribution in violation of
              the Securities Act, subject to any requirement of law that the
              disposition of our property or the property of such investor
              account or accounts be at all times within our or their control
              and subject to our or their ability to resell the Notes pursuant
              to Rule 144A, Regulation S or any exemption from registration
              available under the Securities Act.

       2.     We are an institutional "accredited investor" within the meaning
              of Rule 50l(a)(l), (2), (3) or (7) under the Securities Act who is
              purchasing Notes with a principal amount of at least $250,000 and,
              if the Notes are to be purchased for one or more accounts (the
              "investor accounts") for which we are acting as fiduciary or
              agent, each such account is an institutional accredited investor
              who is purchasing Notes with a principal amount of at least
              $250,000. In the normal course of business or our investing
              activities, we invest in or purchase securities similar to the
              Notes and we have such knowledge and experience in financial
              business matters that we are capable of evaluating the merits and
              risks of purchasing the Notes. We are aware that we (or any
              investor account) may be required to bear the economic risk of an
              investment in the Notes for an indefinite period of time and we
              (or such investor account) are able to bear such risk for an
              indefinite period.

       3.     We acknowledge that none of the Issuer, the initial purchasers or
              any persons representing any of them has made any representation
              to us with respect to any such entity or the offering or sale of
              any Notes, other than the information contained in the Issuer's
              offering memorandum dated February 12, 2003, related to the Notes,
              which offering memorandum has been delivered to it and upon which
              it is relying in making its investment decision with respect to
              the Notes. Accordingly, we acknowledge that no representation or
              warranty is made by the initial purchasers as to the accuracy or
              completeness of such materials. We have had access to such
              financial and other information concerning the Issuer and the
              Notes as we have deemed necessary in connection with our decision
              to purchase any of the Notes including an opportunity to ask
              questions of, and request information from, the Issuer and the
              initial purchasers.

                                     Ex. D-1

<PAGE>

       4.     We understand and agree that the offer and sale of the Notes have
              not been registered under the Securities Act and that such Notes
              are being offered only in a transaction not involving any public
              offering within the meaning of the Securities Act, and that (A) if
              we decide to resell, pledge or otherwise transfer such Notes on
              which a legend setting forth these restrictions appears, such
              Notes may be resold, pledged or otherwise transferred only (i) to
              the Issuer, (ii) in a transaction entitled to an exemption from
              registration provided by Rule 144 under the Securities Act, (iii)
              so long as such Notes are eligible for resale pursuant to Rule
              144A, to a person whom we reasonably believe is a qualified
              institutional buyer that purchases for its own account or for the
              account of a qualified institutional buyer to whom notice is given
              that the resale, pledge or other transfer is being made in
              reliance on Rule 144A, (iv) outside the United States in a
              transaction meeting the requirements of Regulation S, (v) in
              accordance with another exemption from the registration
              requirements of the Securities Act (and based upon an opinion of
              counsel acceptable to the Issuer), in each case in accordance with
              any applicable securities laws of any state of the United States
              or (vi) pursuant to a registration statement which has been
              declared effective under the Securities Act and (B) we will, and
              each subsequent holder is required to, notify any purchaser of
              Notes from us or it of the resale restrictions referred to in (A)
              above, if then applicable. We acknowledge that the foregoing
              restrictions apply to holders of beneficial interest in the Notes,
              as well as to holders of the Notes.

       5.     We understand that, on any proposed resale of any Notes, we will
              be required to furnish to the trustee and the Issuer such
              certifications, legal opinions and other information as the
              trustee and the Issuer may reasonably require to confirm that the
              proposed sale complies with the foregoing restrictions. We further
              understand that the Notes purchased by us will bear a legend to
              the foregoing effect.

       6.     We acknowledge that the Issuer, the trustee, the initial
              purchasers and others will rely upon the truth and accuracy of the
              foregoing acknowledgements, representations and agreements and
              agree that if any of the foregoing acknowledgements,
              representations or agreements are no longer accurate, we shall
              promptly notify the Issuer, the trustee and the initial
              purchasers. If we are acquiring the Notes as a fiduciary or agent
              for one or more investor accounts, we represent that we have sole
              investment discretion with respect to each such account and we
              have full power to make the foregoing acknowledgements,
              representations and agreements on behalf of each account and that
              each such investor account is eligible to purchase the Notes.

                                     Ex. D-2

<PAGE>

       7.     The Issuer, the trustee and the initial purchasers are entitled to
              rely upon this letter and are irrevocably authorized to produce
              this letter or a copy hereof to any interested party in any
              administrative or legal proceeding or official inquiry with
              respect to the matters covered hereby.

                                            Very truly yours,

                                            By:
                                            Name:
                                            Title:

                                    Ex. D-3Exhibit 4(f)

                          REGISTRATION RIGHTS AGREEMENT

              THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made and
entered into as of February 1, 2003 by and among AEP Texas Central Company, a
Texas corporation (the "COMPANY"), and the Initial Purchasers (as hereinafter
defined).

              This Agreement is made pursuant to the Purchase Agreement dated
February 12, 2003 (the "PURCHASE AGREEMENT"), by and among the Company, as
issuer of $275,000,000 aggregate principal amount of 5.50% Senior Notes, Series
A due 2013 and $275,000,000 aggregate principal amount of 6.65% Senior Notes,
Series B due 2033 (collectively, the "NOTES"), and the Initial Purchasers, which
provides for, among other things, the sale by the Company to the Initial
Purchasers of the aggregate principal amount of Notes specified therein. In
order to induce the Initial Purchasers to enter into the Purchase Agreement, the
Company has agreed to provide to the Initial Purchasers and their direct and
indirect transferees the registration rights set forth in this Agreement. The
execution and delivery of this Agreement is a condition to the closing under the
Purchase Agreement.

              In consideration of the foregoing, the parties hereto agree as
follows:

       1. DEFINITIONS. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:

       "ADVICE" shall have the meaning set forth in the last paragraph of
Section 3 hereof.

       "AFFILIATE" has the meaning given to that term in Rule 405 under the
Securities Act or any successor rule thereunder.

       "APPLICABLE PERIOD" shall have the meaning set forth in Section 3(v)
hereof.

       "BUSINESS DAY" shall mean any day other than a Saturday, a Sunday, or a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed.

       "CLOSING DATE" shall mean February 18, 2003, the initial date of delivery
of the Notes from the Company to the Initial Purchasers.

       "COMPANY" shall have the meaning set forth in the preamble to this
Agreement and also includes the Company's successors and permitted assigns.

       "DEPOSITARY" shall mean The Depository Trust Company, or any other
depositary appointed by the Company; PROVIDED, HOWEVER, that such depositary
must have an address in the Borough of Manhattan, The City of New York.

       "EFFECTIVENESS PERIOD" shall have the meaning set forth in Section 2(b)
hereof.

       "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended
from time to time.

<PAGE>

       "EXCHANGE NOTES" shall mean the 5.50% Senior Notes, Series D due 2013 and
the 6.65% Senior Notes, Series E due 2033 issued by the Company under the
Indenture containing terms identical in all material respects to the Notes
(except that (i) interest thereon shall accrue from the last date on which
interest was paid or duly provided for on the Notes or, if no such interest has
been paid, from the date of their original issue, (ii) they will not contain
terms with respect to transfer restrictions under the Securities Act, and (iii)
they will not provide for any Special Interest Premium thereon.)

       "EXCHANGE OFFER" shall mean the offer by the Company to the Holders to
exchange all of the Registrable Notes held by each such Holder for a like amount
of Exchange Notes pursuant to Section 2(a) hereof.

       "EXCHANGE OFFER REGISTRATION" shall mean a registration under the
Securities Act effected pursuant to Section 2(a) hereof.

       "EXCHANGE OFFER REGISTRATION STATEMENT" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form) of the Company as provided in Section 2(a) hereof, and all amendments and
supplements to such registration statement, in each case including the
Prospectus contained therein, all exhibits thereto and all documents
incorporated by reference therein.

       "EXCHANGE PERIOD" shall have the meaning set forth in Section 2(a)
hereof.

       "HOLDER" shall mean any Initial Purchaser, for so long as it owns any
Registrable Notes, and each of its successors, assigns and direct and indirect
transferees who become registered owners of Registrable Notes under the
Indenture.

       "INDENTURE" shall mean the Indenture, dated as of February 1, 2003,
between the Company and Bank One, N.A., as trustee, as the same may be amended
or supplemented from time to time in accordance with the terms thereof.

       "INITIAL PURCHASERS" shall mean Lehman Brothers Inc., Salomon Smith
Barney Inc., Banc of America Securities LLC, ABN AMRO Incorporated, Banc One
Capital Markets, Inc., Barclays Capital Inc., BNY Capital Markets, Inc.,
McDonald Investments Inc., TD Securities (USA) Inc., and UBS Warburg LLC.

       "INSPECTORS" shall have the meaning set forth in Section 3(p) hereof.

       "MAJORITY HOLDERS" shall mean the Holders of a majority of the aggregate
principal amount of outstanding Notes or Exchange Notes, as the case may be.

       "NOTES" shall have the meaning set forth in the preamble to this
Agreement.

       "PARTICIPATING BROKER-DEALER" shall have the meaning set forth in Section
3(v) hereof.

       "PERSON" shall mean an individual, partnership, corporation, trust or
unincorporated organization, limited liability company, or a government or
agency or political subdivision thereof or other legal entity.

                                       2

<PAGE>

       "PROSPECTUS" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Notes covered by a Shelf Registration Statement, and by all other
amendments and supplements to a prospectus, including post-effective amendments,
and in each case including all documents incorporated by reference therein.

       "PURCHASE AGREEMENT" shall have the meaning set forth in the preamble to
this Agreement.

       "RECORDS" shall have the meaning set forth in Section 3(p) hereof.

       "REGISTRABLE NOTES" shall mean the Notes, until the earliest to occur of
(a) the date on which any Notes has been exchanged by a Person other than a
Participating Broker-Dealer for Exchange Notes in the Exchange Offer, (b)
following the exchange by a Participating Broker-Dealer in the Exchange Offer of
any Note for one or more Exchange Notes, the date on which such Exchange Notes
are sold to a purchaser in accordance with the Exchange Offer Registration
Statement, (c) the date on which any Note has been registered under the
Securities Act and disposed of in accordance with the Shelf Registration
Statement and (d) the date on which any Note is eligible to be distributed to
the public pursuant to Rule 144(k) under the Securities Act.

       "REGISTRATION EXPENSES" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC or National Association of Securities Dealers,
Inc. (the "NASD") registration and filing fees, including, if applicable, the
fees and expenses of any "qualified independent underwriter" (and its counsel)
that is required to be retained by any Holder of Registrable Notes in accordance
with the rules and regulations of the NASD, (ii) all fees and expenses incurred
in connection with compliance with state securities or blue sky laws (including
reasonable fees and disbursements of one counsel for all underwriters and
Holders as a group in connection with blue sky qualification of any of the
Exchange Notes or Registrable Notes) and compliance with the rules of the NASD,
(iii) all expenses of any Persons in preparing or assisting in preparing, word
processing, printing and distributing any Registration Statement, any Prospectus
and any amendments or supplements thereto, and in preparing or assisting in
preparing, printing and distributing any underwriting agreements, notes sales
agreements and other documents relating to the performance of and compliance
with this Agreement, (iv) all rating agency fees, (v) the fees and disbursements
of counsel for the Company and of the independent certified public accountants
of the Company and its subsidiaries, including the expenses of any "cold
comfort" letters required by or incident to the performance of and compliance
with this Agreement, (vi) the reasonable fees and expenses of the Trustee and
its counsel and any exchange agent or custodian, and (vii) the reasonable fees
and expenses of any special experts retained by the Company in connection with
any Registration Statement.

       "REGISTRATION STATEMENT" shall mean any registration statement of the
Company which covers any of the Exchange Notes or Registrable Notes pursuant to
the provisions of this Agreement, and all amendments and supplements to any such
Registration Statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
documents incorporated by reference therein.

                                       3

<PAGE>

       "REPRESENTATIVES" shall mean Lehman Brothers Inc. and Salomon Smith
Barney Inc., as representatives of the Initial Purchasers.

       "RULE 144(K) PERIOD" shall mean the period of two years (or such shorter
period as may hereafter be referred to in Rule 144(k) under the Securities Act
(or similar successor rule)) commencing on the Closing Date.

       "SEC" shall mean the Securities and Exchange Commission.

       "SECURITIES ACT" shall mean the Securities Act of 1933, as amended from
time to time.

       "SHELF REGISTRATION" shall mean a registration effected pursuant to
Section 2(b) hereof.

       "SHELF REGISTRATION EVENT" shall have the meaning set forth in Section
2(b) hereof.

       "SHELF REGISTRATION EVENT DATE" shall have the meaning set forth in
Section 2(b) hereof.

       "SHELF REGISTRATION STATEMENT" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2(b) hereof which
covers all of the Registrable Notes (except Registrable Notes which the Holders
have elected not to include in such Shelf Registration Statement or the Holders
of which have not complied with their obligations under the penultimate
paragraph of Section 3 hereof or under the first paragraph of Section 2(b)
hereof) on an appropriate form under Rule 415 under the Securities Act, or any
similar rule that may be adopted by the SEC, and all amendments and supplements
to such registration statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and all
documents incorporated by reference therein.

       "SPECIAL INTEREST PREMIUM" shall have the meaning set forth in Section
2(e) hereof.

       "TIA" shall have the meaning set forth in Section 3(m) hereof.

       "TRUSTEE" shall mean the trustee under the Indenture.

       2. REGISTRATION UNDER THE SECURITIES ACT.

              (a)    EXCHANGE OFFER. Except as set forth in Section 2(b) below,
the Company shall, for the benefit of the Holders, at the Company's cost, (i)
file with the SEC within 210 calendar days after the Closing Date an Exchange
Offer Registration Statement on an appropriate form under the Securities Act
relating to the Exchange Offer, (ii) use its reasonable best efforts to cause
such Exchange Offer Registration Statement to be declared effective under the
Securities Act by the SEC not later than the date which is 270 calendar days
after the Closing Date, and (iii) provided such Exchange Offer Registration
Statement has been declared effective under the Securities Act by the SEC,
promptly commence the Exchange Offer and keep the Exchange Offer open for not
less than 30 days, or longer if required by applicable law, after the date on
which such Registration Statement was declared effective by the SEC (such period
referred to herein as the "EXCHANGE PERIOD") and at the termination thereof,
issue Exchange Notes in exchange for all Registrable Notes tendered prior
thereto in the Exchange Offer.

                                       4
<PAGE>

              Each Holder of Registrable Notes to be exchanged in the Exchange
Offer shall be required, as a condition to participating in the Exchange Offer,
to represent that it acquires the Exchange Notes in the ordinary course of such
Holder's business and that it (i) is not an Affiliate of the Company, (ii) does
not hold any Notes to be exchanged for Exchange Notes in the Exchange Offer that
were acquired other than in the ordinary course of business, (iii) is not a
broker-dealer tendering Registrable Notes acquired directly from the Company,
(iv) at the time of the Exchange Offer, has no arrangements or understandings
with any Person to participate in the Exchange Offer for the purpose of
distributing the Exchange Notes.

              In connection with the Exchange Offer, the Company shall:

              (i)    mail to each Holder a copy of the Prospectus forming part
of the Exchange Offer Registration Statement, together with an appropriate
letter of transmittal and related documents;

              (ii)   utilize the services of the Depositary for the Exchange
Offer with respect to the Notes represented by a global certificate;

              (iii)  permit Holders to withdraw tendered Registrable Notes at
any time prior to the close of business, New York City time, on the last
Business Day of the Exchange Period, by sending to the institution specified in
the notice to Holders, a telegram, telex, facsimile transmission or letter
setting forth the name of such Holder, the principal amount of Registrable Notes
delivered for exchange, and a statement that such Holder is withdrawing his
election to have such Registrable Notes exchanged;

              (iv)   notify each Holder that any Registrable Note not tendered
by such Holder in the Exchange Offer will remain outstanding and continue to
accrue interest but will not retain any rights under this Agreement (except in
the case of the Initial Purchasers and Participating Broker-Dealers as provided
herein); and

              (v)    otherwise comply in all material respects with all
applicable laws and regulations relating to the Exchange Offer.

              As soon as practicable after the close of the Exchange Offer, the
              Company shall:

              (i)    accept for exchange all Registrable Notes or portions
thereof duly tendered and not validly withdrawn pursuant to the Exchange Offer
in accordance with the terms of the Exchange Offer Registration Statement and
letter of transmittal;

              (ii)   deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Notes or portions thereof so accepted for exchange
by the Company; and

              (iii)  issue, and cause the Trustee under the Indenture to
promptly authenticate and deliver to each Holder, Exchange Notes equal in
principal amount to the principal amount of the Notes as are surrendered by such
Holder.

              Interest on each Exchange Note issued pursuant to the Exchange
Offer will accrue from the last date on which interest was paid or duly provided
for on the Note surrendered in

                                       5

<PAGE>

exchange therefor or, if no interest has been paid on such Note, from the date
of original issue of such Note. To the extent not prohibited by any judicial
order, judgment, law, regulation or applicable interpretation of the staff of
the SEC, the Company shall use its reasonable best efforts to complete the
Exchange Offer as provided above, and shall comply with the applicable
requirements of the Securities Act, the Exchange Act and other applicable laws
and regulations in connection with the Exchange Offer. The Exchange Offer shall
not be subject to any conditions other than the conditions referred to in
Section 2(b)(i), (ii) and (iii) below and those conditions that are customary in
similar exchange offers, except as may be required by applicable law. Each
Holder of Registrable Notes who wishes to exchange such Registrable Notes for
Exchange Notes in the Exchange Offer will be required to make certain customary
representations in connection therewith, including, in the case of any Holder,
representations that (i) it is not an Affiliate of the Company, (ii) it is not a
broker-dealer tendering Registrable Notes acquired directly from the Company,
(iii) the Notes being exchanged, and the Exchange Notes to be received, by it
have been or are being acquired in the ordinary course of its business and (iv)
at the time of the Exchange Offer, it has no arrangements or understandings with
any Person to participate in the distribution (within the meaning of the
Securities Act) of the Exchange Notes. The Company shall inform the Initial
Purchasers, after consultation with the Trustee, of the names and addresses of
the Holders to whom the Exchange Offer is made, and the Initial Purchasers shall
have the right to contact such Holders in order to facilitate the tender of
Registrable Notes in the Exchange Offer.

              Upon consummation of the Exchange Offer in accordance with this
Section 2(a), the provisions of this Agreement shall continue to apply, MUTATIS
MUTANDIS, solely with respect to Exchange Notes held by Initial Purchasers and
Participating Broker-Dealers, and the Company shall have no further obligation
to register the Registrable Notes held by any other Holder pursuant to Section
2(b) of this Agreement.

              (b) SHELF REGISTRATION. If (i) because of any change in law,
regulation or in currently prevailing interpretations thereof by the staff of
the SEC, the Company is not permitted to effect the Exchange Offer as
contemplated by Section 2(a) hereof, (ii) the Exchange Offer is not consummated
within 300 calendar days after the Closing Date or (iii) any Holder of
Registrable Notes shall notify the Company prior to the 20th calendar day
following the consummation of the Exchange Offer (A) that such Holder was
prohibited by applicable law or SEC policy from participating in the Exchange
Offer, or (B) that such Holder may not resell the Exchange Notes acquired by it
in the Exchange Offer to the public without delivering a prospectus and that the
Prospectus contained in the Exchange Offer Registration Statement is not
appropriate or available for such resale by such Holder, or (C) that such Holder
is a Participating Broker-Dealer and holds Notes acquired directly from the
Company or one of its Affiliates (any of the events specified in (i), (ii) or
(iii) being a "SHELF REGISTRATION EVENT", and the date of occurrence thereof,
the "SHELF REGISTRATION EVENT DATE"), then in addition to or in lieu of
conducting the Exchange Offer contemplated by Section 2(a), as the case may be,
the Company shall promptly notify the Holders in writing thereof and shall, at
its cost, file as promptly as practicable after such Shelf Registration Event
Date and, in any event, within 210 calendar days after such Shelf Registration
Event Date, a Shelf Registration Statement providing for the sale by the Holders
of all of the Registrable Notes (other than Registrable Notes owned by Holders
who have elected not to include such Registrable Notes in such Shelf
Registration Statement or who have not complied with their obligations under the
penultimate paragraph of Section 3 hereof

                                       6

<PAGE>

or under this paragraph), and shall use its reasonable best efforts to cause
such Shelf Registration Statement to be declared effective by the SEC as soon as
practicable and in any event, on or before the 270th calendar day after the
Shelf Registration Event Date or, if later, the 300th calendar day after the
Closing Date. No Holder of Registrable Notes shall be entitled to include any of
its Registrable Notes in any Shelf Registration pursuant to this Agreement
unless and until such Holder agrees in writing to be bound by all of the
provisions of this Agreement applicable to such Holder and furnishes to the
Company in writing, within 15 calendar days after receipt of a request therefor,
such information as the Company may, after conferring with counsel with regard
to information relating to Holders that would be required by the SEC to be
included in such Shelf Registration Statement or Prospectus included therein,
reasonably request for inclusion in any Shelf Registration Statement or
Prospectus included therein. Each Holder as to which any Shelf Registration is
being effected agrees to furnish to the Company, without request and as soon as
practicable, all information with respect to such Holder necessary to make the
information previously furnished to the Company by such Holder not materially
misleading.

              The Company agrees to use its reasonable best efforts to keep the
Shelf Registration Statement continuously effective and the Prospectus usable
for resales for the earlier of (x) the expiration of the Rule 144(k) Period or
(y) such time as all of the Notes covered by the Shelf Registration Statement
have been sold pursuant to the Shelf Registration Statement or cease to be
Registrable Notes (the period from the effective date of the Shelf Registration
Statement until the earlier of the events described in clauses (x) or (y) being
the "EFFECTIVENESS PERIOD"). The Company shall not permit any securities other
than Registrable Notes to be included in the Shelf Registration. The Company
will, in the event a Shelf Registration Statement is declared effective, provide
to each Holder of Registrable Notes covered thereby, a reasonable number of
copies of the Prospectus which is a part of the Shelf Registration Statement,
notify each such Holder when the Shelf Registration has become effective and
take any other action required to permit unrestricted resales of the Registrable
Notes. The Company further agrees to supplement or amend the Shelf Registration
Statement, if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration Statement
or by the Securities Act or by any other rules and regulations thereunder for
shelf registrations, and the Company agrees to furnish to the Holders of
Registrable Notes covered by such Shelf Registration Statement copies of any
such supplement or amendment promptly after its being used or filed with the
SEC.

              (c) EXPENSES. The Company shall pay all Registration Expenses in
connection with any Registration Statement filed pursuant to Section 2(a) and/or
2(b) hereof and will reimburse the Initial Purchasers for the reasonable fees
and disbursements Dewey Ballantine LLP incurred in connection with the Exchange
Offer. Except as provided herein, each Holder shall pay all expenses of its
counsel, underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder's Registrable Notes pursuant
to the Shelf Registration Statement.

              (d) EFFECTIVE REGISTRATION STATEMENT. An Exchange Offer
Registration Statement pursuant to Section 2(a) hereof or a Shelf Registration
Statement pursuant to Section 2(b) hereof will not be deemed to have become
effective unless it has been declared effective by the SEC; PROVIDED, HOWEVER,
that if, after it has been declared effective, the offering of Registrable Notes
pursuant to such Exchange Offer Registration Statement or Shelf Registration
Statement is

                                       7

<PAGE>

interfered with by any stop order, injunction or other order or requirement of
the SEC or any other governmental agency or court, such Exchange Offer
Registration Statement or Shelf Registration Statement will be deemed not to
have been effective during the period of such interference, until the offering
of Registrable Notes pursuant to such Registration Statement may legally resume.
The Company will be deemed not to have used its reasonable best efforts to cause
the Exchange Offer Registration Statement or the Shelf Registration Statement,
as the case may be, to become, or to remain, effective during the requisite
period if it voluntarily takes any action that would result in any such
Registration Statement not being declared effective or that would result in the
otherwise eligible Holders of Registrable Notes covered thereby not being able
to exchange or offer and sell such Registrable Notes during that period, unless
such action is required by applicable law or regulation.

              (e) SPECIAL INTEREST PREMIUM. In the event that:

              (i)    the Exchange Offer Registration Statement is not filed with
       the SEC on or prior to the 210th day after the Closing Date, then,
       commencing on the 211th calendar day after the Closing Date, a special
       interest premium (the "SPECIAL INTEREST PREMIUM") shall accrue on the
       principal amount of the Notes at a rate of 0.25% per annum;

              (ii)   the Exchange Offer Registration Statement is not declared
       effective by the SEC on or prior to the 270th calendar day after the
       Closing Date, then, commencing on the 271st calendar day after the
       Closing Date, a Special Interest Premium shall accrue on the principal
       amount of the Notes at a rate of 0.25% per annum;

              (iii)  (A) the Company has not exchanged Exchange Notes for all
       Notes validly tendered, in accordance with the terms of the Exchange
       Offer, on or prior to the 300th calendar day after the Closing Date or
       (B) if the Shelf Registration Statement is required to be filed pursuant
       to Section 2(b) but is not declared effective by the SEC on or prior to
       the 300th calendar day after the Closing Date, then, commencing on the
       301st calendar day after the Closing Date, a Special Interest Premium
       shall accrue on the principal amount of the Notes at the rate of 0.50%
       per annum; or

              (iv)   the Shelf Registration Statement has been declared
       effective and such Shelf Registration Statement ceases to be continuously
       effective or the Prospectus contained in such Shelf Registration
       Statement ceases to be usable for resales (A) at any time prior to the
       expiration of the Effectiveness Period or (B) if related to corporate
       developments, public filings with the SEC or similar events or because
       the Prospectus contains an untrue statement of a material fact or omits
       to state a material fact required to be stated therein or necessary in
       order to make the statements therein not misleading, and such failure
       continues for more than 90 calendar days (whether or not consecutive and
       whether or not arising out of a single or multiple circumstances) in any
       twelve-month period, then the Special Interest Premium shall accrue on
       the principal amount of the Notes at a rate of 0.50% per annum commencing
       on the day that (in the case of (A) above), or the 91st calendar
       (cumulative) day after (in the case of (B) above), such Shelf
       Registration Statement ceases to be effective or the Prospectus ceases to
       be usable for resales; PROVIDED, HOWEVER, that the aggregate amount of
       the Special Interest Premium in respect of the Notes may not exceed 0.50%
       per annum (regardless of whether multiple

                                       8

<PAGE>

       events triggering a Special Interest Premium under this subsection (e)
       exist); PROVIDED, FURTHER, HOWEVER, that (1) upon the filing of the
       Exchange Offer Registration Statement (in the case of clause (i) above),
       (2) upon the effectiveness of the Exchange Offer Registration Statement
       (in the case of clause (ii) above), (3) upon the exchange of Exchange
       Notes for all Notes validly tendered (in the case of clause (iii)(A)
       above) or upon the effectiveness of the Shelf Registration Statement (in
       the case of clause (iii)(B) above) and (4) upon the earlier of (y) such
       time as the Shelf Registration Statement which had ceased to remain
       effective or the Prospectus which had ceased to be usable for resales
       again becomes effective and usable for resales, as applicable, and (z)
       the expiration of the Effectiveness Period (in each case of clause (iv)
       above), the Special Interest Premium on the principal amount of the Notes
       as a result of such clause (or the relevant subclause thereof) shall
       cease to accrue.

              Any Special Interest Premium due pursuant to Section 2(e)(i),
(ii), (iii) or (iv) above will be payable in cash on the next succeeding
February 15 or August 15, as the case may be, to eligible Holders (as determined
under this subsection (e)) on the relevant record dates for the payment of
interest pursuant to the Indenture.

              (f) SPECIFIC ENFORCEMENT. Without limiting the remedies available
to the Holders, the Company acknowledges that any failure by the Company to
comply with its obligations under Section 2(a) and Section 2(b) hereof may
result in material irreparable injury to the Holders for which there is no
adequate remedy at law, that it would not be possible to measure damages for
such injuries precisely and that, in the event of any such failure, any Holder
may obtain such relief as may be required to specifically enforce the Company's
obligations under Section 2(a) and Section 2(b) hereof.

       3. REGISTRATION PROCEDURES. In connection with the obligations of the
Company with respect to the Registration Statements pursuant to Sections 2(a)
and 2(b) hereof, the Company shall:

              (a) prepare and file with the SEC a Registration Statement or
Registration Statements as prescribed by Sections 2(a) and 2(b) hereof within
the relevant time period specified in Section 2 hereof on the appropriate form
under the Securities Act, which form shall (i) be selected by the Company, (ii)
in the case of a Shelf Registration, be available for the sale of the
Registrable Notes by the selling Holders thereof and, in the case of an Exchange
Offer, be available for the exchange of Registrable Notes, and (iii) comply as
to form in all material respects with the requirements of the applicable form
and include all financial statements required by the SEC to be filed therewith;
and use its reasonable best efforts to cause such Registration Statement to
become effective and remain effective (and, in the case of a Shelf Registration
Statement, the Prospectus to be usable for resales) in accordance with Section 2
hereof; provided, however, that if (1) such filing is pursuant to Section 2(b),
or (2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2(a) is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Notes, before filing
any Registration Statement or Prospectus or any amendments or supplements
thereto, the Company shall furnish to and afford the Holders of the Registrable
Notes and each such Participating Broker-Dealer, as the case may be, covered by
such Registration Statement, their counsel and the managing underwriters, if
any, a reasonable

                                       9

<PAGE>

opportunity to review copies of all such documents (including copies of any
documents to be incorporated by reference therein and all exhibits thereto)
proposed to be filed; and the Company shall not file any Registration Statement
or Prospectus or any amendments or supplements thereto in respect of which the
Holders must be afforded an opportunity to review prior to the filing of such
document if the Majority Holders of the Registrable Notes, depending solely upon
which Holders must be afforded the opportunity of such review, or such
Participating Broker-Dealer, as the case may be, their counsel or the managing
underwriters, if any, shall reasonably object in a timely manner;

              (b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be necessary to
keep such Registration Statement effective for the Effectiveness Period or the
Applicable Period, as the case may be, and cause each Prospectus to be
supplemented, if so determined by the Company or requested by the SEC, by any
required prospectus supplement and as so supplemented to be filed pursuant to
Rule 424 (or any similar provision then in force) under the Securities Act, and
comply with the provisions of the Securities Act, the Exchange Act and the rules
and regulations promulgated thereunder applicable to it with respect to the
disposition of all Notes covered by each Registration Statement during the
Effectiveness Period or the Applicable Period, as the case may be, in accordance
with the intended method or methods of distribution by the selling Holders
thereof described in this Agreement (including sales by any Participating
Broker-Dealer);

              (c) in the case of an Exchange Offer Registration Statement, if in
the reasonable opinion of counsel to the Company there is a question as to
whether the Exchange Offer is permitted by applicable law, seek a no-action
letter or other favorable decision from the SEC allowing the Company to
consummate an Exchange Offer for such Notes; the Company hereby agrees to pursue
the issuance of such a decision to the SEC staff level but shall not be required
to take commercially unreasonable action to effect a change of SEC policy; the
Company hereby agrees, however, to (i) participate in telephonic conferences
with the SEC, (ii) deliver to the SEC staff an analysis prepared by counsel to
the Company setting forth the legal bases, if any, upon which such counsel has
concluded that such an Exchange Offer should be permitted and (iii) diligently
pursue a resolution (which need not be favorable) by the SEC staff of such
submission;

              (d) in the case of an Exchange Offer Registration Statement, prior
to the effectiveness of such statement, provide a supplemental letter to the SEC
(i) stating that the Company is registering the Exchange Offer in reliance on
the position of the SEC enunciated in EXXON CAPITAL HOLDINGS CORPORATION
(available May 13, 1988), MORGAN STANLEY AND CO. INC. (available June 5, 1991),
BROWN & WOOD LLP (available February 7, 1997) and, if applicable, any no-action
letter obtained pursuant to Section 3(c) and (ii) including a representation
that the Company has not entered into any arrangement or understanding with any
Person to distribute the Exchange Notes to be received in the Exchange Offer and
that, to the best of the Company's information and belief, each Holder
participating in the Exchange Offer is acquiring the Exchange Notes in its
ordinary course of business and has no arrangement or understanding with any
Person to participate in the distribution of the Exchange Notes received in the
Exchange Offer;

              (e) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Notes included in the Shelf Registration Statement, at least three
Business Days prior to filing, that a

                                       10

<PAGE>

Shelf Registration Statement with respect to the Registrable Notes is being
filed and advising such Holder that the distribution of Registrable Notes will
be made in accordance with the method selected by the Majority Holders of the
Registrable Notes, (ii) furnish to each Holder of Registrable Notes included in
the Shelf Registration Statement and to each underwriter of an underwritten
offering of Registrable Notes, if any, without charge, as many copies of each
Prospectus, including each preliminary prospectus, and any amendment or
supplement thereto, and such other documents as such Holder or underwriter may
reasonably request, in order to facilitate the public sale or other disposition
of the Registrable Notes and (iii) consent to the use of the Prospectus or any
amendment or supplement thereto by each of the selling Holders of Registrable
Notes included in the Shelf Registration Statement in connection with the
offering and sale of the Registrable Notes covered by the Prospectus or any
amendment or supplement thereto;

              (f) in the case of a Shelf Registration, register or qualify the
Registrable Notes under all applicable state securities or "blue sky" laws of
such jurisdictions by the time the applicable Registration Statement is declared
effective by the SEC as any Holder of Registrable Notes covered by a
Registration Statement and each underwriter of an underwritten offering of
Registrable Notes shall reasonably request in writing in advance of such date of
effectiveness, and do any and all other acts and things which may be reasonably
necessary or advisable to enable such Holder and underwriter to consummate the
disposition in each such jurisdiction of such Registrable Notes owned by such
Holder; PROVIDED, HOWEVER, that the Company shall not be required to (i) qualify
as a foreign corporation or as a dealer in securities in any jurisdiction where
it would not otherwise be required to qualify but for this Section 3(f), (ii)
file any general consent to service of process in any jurisdiction where it
would not otherwise be subject to such service of process or (iii) subject
itself to taxation in any such jurisdiction if it is not then so subject;

              (g) (1) in the case of a Shelf Registration or (2) if
Participating Broker-Dealers from whom the Company has received prior written
notice that they will be utilizing the Prospectus contained in the Exchange
Offer Registration Statement as provided in Section 3(v) hereof, are seeking to
sell Exchange Notes and are required to deliver Prospectuses, promptly notify
each Holder of Registrable Notes, or such Participating Broker-Dealers, as the
case may be, their counsel and the managing underwriters, if any, and promptly
confirm such notice in writing (i) when a Registration Statement has become
effective and when any post-effective amendments thereto become effective, (ii)
of any request by the SEC or any state securities authority for amendments and
supplements to a Registration Statement or Prospectus or for additional
information after the Registration Statement has become effective, (iii) of the
issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of a Registration Statement or the qualification of
the Registrable Notes or the Exchange Notes to be offered or sold by any
Participating Broker-Dealer in any jurisdiction described in Section 3(f) hereof
or the initiation of any proceedings for that purpose, (iv) in the case of a
Shelf Registration, if, between the effective date of a Registration Statement
and the closing of any sale of Registrable Notes covered thereby, the
representations and warranties of the Company contained in any purchase
agreement, securities sales agreement or other similar agreement cease to be
true, correct and complete in all material respects, (v) of the happening of any
event or the failure of any event to occur or the discovery of any facts, during
the Effectiveness Period, which makes any statement, made in such Registration
Statement or the related Prospectus untrue in

                                       11

<PAGE>

any material respect or which causes such Registration Statement or Prospectus
to omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, as well as any other corporate developments, public filings with the
SEC or similar events causing such Registration Statement not to be effective or
the Prospectus not to be useable for resales and (vi) of the reasonable
determination of the Company that a post-effective amendment to the Registration
Statement would be appropriate;

              (h) obtain the withdrawal of any order suspending the
effectiveness of a Registration Statement as soon as practicable;

              (i) in the case of a Shelf Registration, furnish to each Holder of
Registrable Notes included within the coverage of such Shelf Registration
Statement, without charge, at least one conformed copy of each Registration
Statement relating to such Shelf Registration and any post-effective amendment
thereto (without documents incorporated therein by reference or exhibits
thereto, unless requested);

              (j) in the case of a Shelf Registration, cooperate with the
selling Holders of Registrable Notes to facilitate the timely preparation and
delivery of certificates representing Registrable Notes to be sold and not
bearing any restrictive legends (except any customary legend borne by securities
held through The Depository Trust Company or any similar depository) and in such
denominations (consistent with the provisions of the Indenture and supplemental
indenture or the officer's certificate establishing the forms and the terms of
the Notes pursuant to the Indenture) and registered in such names as the selling
Holders or the underwriters may reasonably request (provided such names are
consistent with the names of the selling securityholders set forth in the Shelf
Registration Statement) at least two Business Days prior to the closing of any
sale of Registrable Notes pursuant to such Shelf Registration Statement;

              (k) in the case of a Shelf Registration or an Exchange Offer
Registration, promptly after the occurrence of any event specified in Section
3(g)(ii), 3(g)(iii), 3(g)(v) (subject to the 90 calendar day cumulative grace
period within any twelve-month period provided for in Section 2(e)(iv)(B)) or
3(g)(vi) hereof, prepare a supplement or post-effective amendment to such
Registration Statement or the related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Notes, such Prospectus will not
include any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and the Company shall notify each
Holder to suspend use of the Prospectus as promptly as practicable after the
occurrence of such an event, and each Holder hereby agrees to suspend use of the
Prospectus until the Company has amended or supplemented the Prospectus to
correct such misstatement or omission;

              (l) obtain a CUSIP number for the Exchange Notes or the
Registrable Notes, as the case may be, not later than the effective date of a
Registration Statement, and provide the Trustee with certificates for the
Exchange Notes or the Registrable Notes, as the case may be, in a form eligible
for deposit with the Depositary;

                                       12

<PAGE>

              (m) cause the Indenture to be qualified under the Trust Indenture
Act of 1939, as amended (the "TIA"), in connection with the registration of the
Exchange Notes or Registrable Notes, as the case may be, and effect such changes
to such documents as may be required for them to be so qualified in accordance
with the terms of the TIA and execute, and cause the Trustee to execute, all
documents as may be required to effect such changes, and all other forms and
documents required to be filed with the SEC to enable such documents to be so
qualified in a timely manner;

              (n) in the case of a Shelf Registration, enter into such
agreements (including underwriting agreements) as are customary in underwritten
offerings and take all such other appropriate actions in connection therewith as
are reasonably requested by the Holders of at least 25% in aggregate principal
amount of the Registrable Notes in order to expedite or facilitate the
registration or the disposition of the Registrable Notes;

              (o) in the case of a Shelf Registration, whether or not an
underwriting agreement is entered into and whether or not the registration is an
underwritten registration, if requested by (x) an Initial Purchaser, in the case
where such Initial Purchaser holds Notes acquired by it as part of its initial
placement, or (y) Holders of at least 25% in aggregate principal amount of the
Registrable Notes covered thereby: (i) make such representations and warranties
to Holders of such Registrable Notes and the underwriters (if any), with respect
to the business of the Company as then conducted and the Registration Statement,
Prospectus and documents, if any, incorporated or deemed to be incorporated by
reference therein, in each case, as are customarily made by issuers to
underwriters in underwritten offerings, and confirm the same if and when
requested; (ii) obtain opinions of counsel to the Company and updates thereof
(which may be in the form of a reliance letter) in form and substance reasonably
satisfactory to the managing underwriters (if any) and the Holders of a majority
in amount of the Registrable Notes being sold, addressed to each selling Holder
and the underwriters (if any) covering the matters customarily covered in
opinions requested in underwritten offerings and such other matters as may be
reasonably requested by such underwriters (it being agreed that the matters to
be covered by such opinion may be subject to customary qualifications and
exceptions); (iii) obtain "cold comfort" letters and updates thereof in form and
substance reasonably satisfactory to the managing underwriters from the
independent certified public accountants of the Company, addressed to each of
the underwriters, such letters to be in customary form and covering matters of
the type customarily covered in "cold comfort" letters in connection with
underwritten offerings and such other matters as reasonably requested by such
underwriters in accordance with Statement on Auditing Standards No. 72; and (iv)
if an underwriting agreement is entered into, the same shall contain
indemnification provisions and procedures no less favorable than those set forth
in Section 4 hereof (or such other provisions and procedures acceptable to
Holders of a majority in aggregate principal amount of Registrable Notes covered
by such Registration Statement and the managing underwriters) customary for such
agreements with respect to all parties to be indemnified pursuant to said
Section (including, without limitation, such underwriters and selling Holders);
and in the case of an underwritten registration, the above requirements shall be
satisfied at each closing under the related underwriting agreement or as and to
the extent required thereunder;

              (p) if (1) a Shelf Registration is filed pursuant to Section 2(b)
or (2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2(a) is required

                                       13

<PAGE>

to be delivered under the Securities Act by any Participating Broker-Dealer who
seeks to sell Exchange Notes during the Applicable Period, make reasonably
available for inspection by any selling Holder of Registrable Notes or
Participating Broker-Dealer, as applicable, who certifies to the Company that it
has a current intention to sell Registrable Notes pursuant to the Shelf
Registration, any underwriter participating in any such disposition of
Registrable Notes, if any, and any attorney, accountant or other agent retained
by any such selling Holder, Participating Broker-Dealer, as the case may be, or
underwriter (collectively, the "INSPECTORS"), at the offices where normally
kept, during the Company's normal business hours, all financial and other
records, pertinent organizational and operational documents and properties of
the Company (collectively, the "RECORDS") as shall be reasonably necessary to
enable them to conduct due diligence activities, and cause the officers,
trustees and employees of the Company to supply all relevant information in each
case reasonably requested by any such Inspector in connection with such
Registration Statement; Records and information which the Company determines, in
good faith, to be confidential and any Records and information which it notifies
the Inspectors are confidential shall not be disclosed to any Inspector except
where (i) the disclosure of such Records or information is necessary to avoid or
correct a material misstatement or omission in such Registration Statement, (ii)
the release of such Records or information is ordered pursuant to a subpoena or
other order from a court of competent jurisdiction or is necessary in connection
with any action, suit or proceeding or (iii) such Records or information
previously has been made generally available to the public; each selling Holder
of such Registrable Notes and each such Participating Broker-Dealer will be
required to agree in writing that Records and information obtained by it as a
result of such inspections shall be deemed confidential and shall not be used by
it as the basis for any market transactions in the securities of the Company
unless and until such is made generally available to the public through no fault
of an Inspector or a selling Holder; and each selling Holder of such Registrable
Notes and each such Participating Broker-Dealer will be required to further
agree in writing that it will, upon learning that disclosure of such Records or
information is sought in a court of competent jurisdiction, or in connection
with any action, suit or proceeding, give notice to the Company and allow the
Company at its expense to undertake appropriate action to prevent disclosure of
the Records and information deemed confidential;

              (q) comply with all applicable rules and regulations of the SEC so
long as any provision of this Agreement shall be applicable and make generally
available to its security holders earning statements satisfying the provisions
of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar
rule promulgated under the Securities Act) no later than 45 calendar days after
the end of any 12-month period (or 90 calendar days after the end of any
12-month period if such period is a fiscal year) (i) commencing at the end of
any fiscal quarter in which Registrable Notes are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company after the effective date of a Registration
Statement, which statements shall cover said 12-month periods, provided that the
obligations under this paragraph (q) shall be satisfied by the timely filing of
quarterly and annual reports on Forms 10-Q and 10-K under the Exchange Act;

              (r) if an Exchange Offer is to be consummated, upon delivery of
the Registrable Notes by Holders to the Company (or to such other Person as
directed by the Company), in exchange for the Exchange Notes, the Company shall
mark, or cause to be marked, on such

                                       14

<PAGE>

Notes delivered by such Holders that such Notes are being cancelled in exchange
for the Exchange Notes; it being understood that in no event shall such Notes be
marked as paid or otherwise satisfied;

              (s) cooperate with each seller of Registrable Notes covered by any
Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Notes and their respective counsel in connection
with any filings required to be made with the NASD;

              (t) prior to issuing the Exchange Notes, obtain all regulatory and
governmental approvals necessary for the issuance of the Exchange Notes,
including, without limitation, any required orders or consents of the Public
Utility Commission of Texas or under the Public Utility Holding Company Act of
1935 pertaining to the Company's capital structure;

              (u) take all other steps necessary to effect the registration of
the Registrable Notes covered by a Registration Statement contemplated hereby;
and

              (v) (A) in the case of the Exchange Offer Registration Statement
(i) include in the Exchange Offer Registration Statement a section entitled
"Plan of Distribution," which section shall be reasonably acceptable to the
Initial Purchasers or another representative of the Participating
Broker-Dealers, and which shall contain a summary statement of the positions
taken or policies made by the staff of the SEC with respect to the potential
"underwriter" status of any broker-dealer that holds Registrable Notes acquired
for its own account as a result of market-making activities or other trading
activities (a "PARTICIPATING BROKER-DEALER") and that will be the beneficial
owner (as defined in Rule 13d-3 under the Exchange Act) of Exchange Notes to be
received by such broker-dealer in the Exchange Offer, whether such positions or
policies have been publicly disseminated by the staff of the SEC or such
positions or policies, in the reasonable judgment of the Initial Purchasers or
such other representative, represent the prevailing views of the staff of the
SEC, including a statement that any such broker-dealer who receives Exchange
Notes for Registrable Notes pursuant to the Exchange Offer may be deemed a
statutory underwriter and must deliver a prospectus meeting the requirements of
the Securities Act in connection with any resale of such Exchange Notes, (ii)
furnish to each Participating Broker-Dealer who has delivered to the Company the
notice referred to in Section 3(g), without charge, as many copies of each
Prospectus included in the Exchange Offer Registration Statement, including any
preliminary Prospectus, and any amendment or supplement thereto, as such
Participating Broker-Dealer may reasonably request (the Company hereby consents
to the use of the Prospectus forming part of the Exchange Offer Registration
Statement or any amendment or supplement thereto by any Person subject to the
prospectus delivery requirements of the Securities Act, including all
Participating Broker-Dealers, in connection with the sale or transfer of the
Exchange Notes covered by the Prospectus or any amendment or supplement
thereto), (iii) use its reasonable best efforts to keep the Exchange Offer
Registration Statement effective and to amend and supplement the Prospectus
contained therein in order to permit such Prospectus to be lawfully delivered by
all Persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such Persons must comply with such requirements
under the Securities Act and applicable rules and regulations in order to resell
the Exchange Notes; PROVIDED, HOWEVER, that such period shall not be required to
exceed 210 days (or such longer period if extended pursuant to the last sentence
of Section 3 hereof) (the "APPLICABLE PERIOD"), and (iv) include in the
transmittal letter or similar documentation to

                                       15

<PAGE>

be executed by an exchange offeree in order to participate in the Exchange Offer
(x) the following provision:

              "If the exchange offeree is a broker-dealer holding Registrable
              Notes acquired for its own account as a result of market-making
              activities or other trading activities, it will deliver a
              prospectus meeting the requirements of the Securities Act in
              connection with any resale of Exchange Notes received in respect
              of such Registrable Notes pursuant to the Exchange Offer";

       and (y) a statement to the effect that by a Participating Broker-Dealer
       making the acknowledgment described in clause (x) and by delivering a
       Prospectus in connection with the exchange of Registrable Notes, the
       Participating Broker-Dealer will not be deemed to admit that it is an
       underwriter within the meaning of the Securities Act; and

       (B)    in the case of any Exchange Offer Registration Statement, the
       Company agrees to deliver to the Initial Purchasers or to another
       representative of the Participating Broker-Dealers, if reasonably
       requested by an Initial Purchaser or such other representative of
       Participating Broker-Dealers, on behalf of the Participating
       Broker-Dealers upon consummation of the Exchange Offer (i) an opinion of
       counsel in form and substance reasonably satisfactory to such Initial
       Purchaser or such other representative of the Participating
       Broker-Dealers, covering the matters customarily covered in opinions
       requested in connection with Exchange Offer Registration Statements and
       such other matters as may be reasonably requested (it being agreed that
       the matters to be covered by such opinion may be subject to customary
       qualifications and exceptions), (ii) an officer's certificate
       substantially similar to that specified in Section 7(h) of the Purchase
       Agreement and such additional certifications as are customarily delivered
       in a public offering of debt Notes and (iii) upon the effectiveness of
       the Exchange Offer Registration Statement, comfort letters, in each case,
       in customary form if permitted by Statement on Auditing Standards No. 72.

              The Company may require each seller of Registrable Notes as to
which any registration is being effected to furnish to the Company such
information regarding such seller as may be required by the staff of the SEC to
be included in a Registration Statement. The Company may exclude from such
registration the Registrable Notes of any seller who unreasonably fails to
furnish such information within a reasonable time after receiving such request.
The Company shall have no obligation to register under the Securities Act the
Registrable Notes of a seller who so fails to furnish such information and,
notwithstanding anything to the contrary herein, no Special Interest Premium
shall accrue on any such Registrable Notes.

              In the case of a Shelf Registration Statement, or if Participating
Broker-Dealers who have notified the Company that they will be utilizing the
Prospectus contained in the Exchange Offer Registration Statement as provided in
this Section 3(v) are seeking to sell Exchange Notes and are required to deliver
Prospectuses, each Holder agrees that, upon receipt of any notice from the
Company of the occurrence of any event specified in Section 3(g)(ii), 3(g)(iii),
3(g)(v) or 3(g)(vi) hereof, such Holder will forthwith discontinue disposition
of

                                       16

<PAGE>

Registrable Notes pursuant to a Registration Statement until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 3(k) hereof or until it is advised in writing (the "ADVICE") by the
Company that the use of the applicable Prospectus may be resumed, and, if so
directed by the Company, such Holder will deliver to the Company (at the
Company's expense) all copies in such Holder's possession, other than permanent
file copies then in such Holder's possession, of the Prospectus covering such
Registrable Notes or Exchange Notes, as the case may be, current at the time of
receipt of such notice. If the Company shall give any such notice to suspend the
disposition of Registrable Notes or Exchange Notes, as the case may be, pursuant
to a Registration Statement, the Company shall use its reasonable best efforts
to file and have declared effective (if an amendment), as soon as practicable
after the resolution of the related matters, an amendment or supplement to the
Registration Statement and shall extend the period during which such
Registration Statement is required to be maintained effective and the Prospectus
usable for resales pursuant to this Agreement by the number of days in the
period from and including the date of the giving of such notice to and including
the date when the Company shall have made available to the Holders (x) copies of
the supplemented or amended Prospectus necessary to resume such dispositions or
(y) the Advice.

       4. INDEMNIFICATION AND CONTRIBUTION. (a) In connection with a Shelf
Registration Statement or in connection with any delivery of a Prospectus
contained in an Exchange Offer Registration Statement by any Participating
Broker-Dealer or Initial Purchaser, as applicable, who seeks to sell Exchange
Notes, to the extent permitted by law, the Company shall indemnify and hold
harmless each Holder of Registrable Notes included within any such Shelf
Registration Statement and each Participating Broker-Dealer or Initial Purchaser
selling Exchange Notes, its officers and directors and each Person, if any, who
controls any such Person within the meaning of Section 15 of the Securities Act,
against any and all losses, claims, damages or liabilities, joint or several, to
which you, they or any of you or them may become subject under the Exchange Act
or otherwise, and to reimburse you and such controlling person or persons, if
any, for any legal or other expenses incurred by you or them in connection with
defending any action, insofar as such losses, claims, damages, liabilities or
actions arise out of or are based upon any alleged untrue statement or untrue
statement of a material fact contained in any Registration Statement or in any
Prospectus, or if the Company shall furnish or cause to be furnished to you any
amendments or any supplements to any Prospectus, in any Prospectus covering
Registrable Notes or Exchange Notes, as applicable, as so amended or
supplemented, or arise out of or are based upon any alleged omission or omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses,
claims, damages, liabilities or actions arise out of or are based upon any such
alleged untrue statement or omission, or untrue statement or omission which was
made in a Registration Statement or in a Prospectus, or in such Prospectus as so
amended or supplemented, in reliance upon and in conformity with information
furnished in writing to the Company by or through any Initial Purchaser or
Participating Broker-Dealer expressly for use therein or with any statements in
or omissions from that part of the Registration Statement that shall constitute
the Statement of Eligibility under the Trust Indenture Act of any indenture
trustee under an indenture of the Company, and except that this indemnity shall
not inure to the benefit of any Participating Broker-Dealer and Initial
Purchaser (or of any person controlling any Initial Purchaser or Participating
Broker-Dealer) on account of any losses, claims, damages, liabilities or actions
arising from the sale of the Notes to any person if such loss arises from the
fact that a copy of the Prospectus, as the same may then be supplemented or
amended to the extent such Prospectus was

                                       17

<PAGE>

provided to such Initial Purchaser or Participating Broker-Dealer by the Company
(excluding, however, any document then incorporated or deemed incorporated
therein by reference), was not sent or given by such Initial Purchaser or
Participating Broker-Dealer to such person with or prior to the written
confirmation of the sale involved and the alleged omission or alleged untrue
statement or omission or untrue statement was corrected in the Prospectus as
supplemented or amended at the time of such confirmation, and such Prospectus,
as amended or supplemented, was timely delivered to such Initial Purchaser or
Participating Broker-Dealer by the Company. Each Initial Purchaser or
Participating Broker-Dealer agrees promptly after the receipt by such Initial
Purchaser or Participating Broker-Dealer of written notice of the commencement
of any action in respect to which indemnity from the Company on account of its
agreement contained in this Section 4(a) may be sought by such Initial Purchaser
or Participating Broker-Dealer, or by any person controlling such Initial
Purchaser or Participating Broker-Dealer, to notify the Company in writing of
the commencement thereof, but the omission so to notify the Company of any such
action shall not release the Company from any liability which it may have to
such Initial Purchaser or Participating Broker-Dealer or to such controlling
person otherwise than on account of the indemnity agreement contained in this
Section 4(a). In case any such action shall be brought against any Initial
Purchaser or Participating Broker-Dealer or any such person controlling any
Initial Purchaser or Participating Broker-Dealer or such Initial Purchaser or
Participating Broker-Dealer shall notify the Company of the commencement
thereof, as above provided, the Company shall be entitled to participate in,
and, to the extent that it shall wish, including the selection for counsel (such
counsel to be reasonably acceptable to the indemnified party), to direct the
defense thereof at its own expense. In case the Company elects to direct such
defense and selects such counsel (hereinafter, Company's counsel), such Initial
Purchaser or Participating Broker-Dealer or any controlling person shall have
the right to employ its own counsel, but in any such case, the fees and expenses
of such counsel shall be at the expense of such Initial Purchaser or
Participating Broker-Dealer or controlling person unless (i) the Company has
agreed in writing to pay such fees and expenses or (ii) the named parties to any
such action (including any impleaded parties) include both such Initial
Purchaser or Participating Broker-Dealer or any controlling person and the
Company and such Initial Purchaser or Participating Broker-Dealer or any
controlling person shall have been advised by its counsel that a conflict of
interest between the Company and such Initial Purchaser or Participating
Broker-Dealer or any controlling person may arise (and the Company's counsel
shall have concurred in good faith with such advice) and for this reason it is
not desirable for the Company's counsel to represent both the indemnifying party
and the indemnified party (it being understood, however, that the Company shall
not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys for such Initial Purchaser
or Participating Broker-Dealer or any controlling person (plus any local counsel
retained by such Initial Purchaser or Participating Broker-Dealer or any
controlling person in their reasonable judgment), which firm (or firms) shall be
designated in writing by such Initial Purchaser or Participating Broker-Dealer
or any controlling person).

              (b) Each Initial Purchaser or Participating Broker-Dealer agrees,
to the extent permitted by law, severally and not jointly, to indemnify, hold
harmless and reimburse the Company, its directors and such of its officers as
shall have signed any Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act, to
the same extent and upon the same terms as the indemnity agreement of the

                                       18

<PAGE>

Company set forth in Section 4(a) hereof , but only with respect to untrue
statements or alleged untrue statements or omissions or alleged omissions made
in a Registration Statement, or in a Prospectus, or in such Prospectus as
amended or supplemented, in reliance upon and in conformity with information
furnished in writing to the Company by an Initial Purchaser or Participating
Broker-Dealer expressly for use therein. The Company agrees promptly after the
receipt by it of written notice of the commencement of any action in respect to
which indemnity from such Initial Purchaser or Participating Broker-Dealer on
account of your agreement contained in this Section 4(b) may be sought by the
Company, or by any person controlling the Company, to notify such Initial
Purchaser or Participating Broker-Dealer in writing of the commencement thereof,
but the Company's omission so to notify such Initial Purchaser or Participating
Broker-Dealer of any such action shall not release such Initial Purchaser or
Participating Broker-Dealer from any liability which you may have to the Company
or to such controlling person otherwise than on account of the indemnity
agreement contained in this Section 4(b).

              (c) If recovery is not available or insufficient under Section
4(a) or 4(b) hereof for any reason other than as specified therein, the
indemnified party shall be entitled to contribution for any and all losses,
claims, damages, liabilities and expenses for which such indemnification is so
unavailable or insufficient under this Section 4(c). In determining the amount
of contribution to which such indemnified party is entitled, there shall be
considered the portion of the proceeds of the offering of the Notes realized,
the relative knowledge and access to information concerning the matter with
respect to which the claim was asserted, the opportunity to correct and prevent
any statement or omission, and any equitable considerations appropriate under
the circumstances. The Company and the Holders agree that it would not be
equitable if the amount of such contribution were determined by pro rata or per
capita allocation (even if the Holders were treated as one entity for such
purpose) without reference to the considerations called for in the previous
sentence. No Initial Purchaser or Participating Broker-Dealer or any person
controlling such Initial Purchaser or Participating Broker-Dealer shall be
obligated to contribute any amount or amounts hereunder which in the aggregate
exceed the total price of the Notes purchased by such Initial Purchaser or
Participating Broker-Dealer less the aggregate amount of any damages which such
Initial Purchaser or Participating Broker-Dealer and its controlling persons
have otherwise been required to pay in respect of the same claim or any
substantially similar claim. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. An Initial Purchaser's or Participating Broker-Dealer's
obligation to contribute under this Section 4 is in proportion to its purchase
obligations under the Purchase Agreement and not joint with any other Initial
Purchaser or Participating Broker-Dealer.

              (d) No indemnifying party shall, without the prior written consent
of the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which contribution could be sought under this Section 4
(whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding

                                       19

<PAGE>

or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of such indemnified party.

              (e) In no event shall any indemnifying party shall have any
liability or responsibility in respect of the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action or claim effected without its prior written consent.

              The agreements contained in this Section 4 hereof shall remain in
full force and effect regardless of any investigation made by or on behalf of
any Person.

       5. PARTICIPATION IN AN UNDERWRITTEN REGISTRATION. No Holder may
participate in an underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's Registrable Notes on the basis provided in the
underwriting arrangement approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agreements, lock-up letters and
other documents reasonably required under the terms of such underwriting
arrangements.

       6. SELECTION OF UNDERWRITERS. The Holders of Registrable Notes covered by
the Shelf Registration Statement who desire to do so may sell the Notes covered
by such Shelf Registration in an underwritten offering, subject to the
provisions of Section 3(l) hereof. In any such underwritten offering, the
underwriter or underwriters and manager or managers that will administer the
offering will be selected by the Holders of a majority in aggregate principal
amount of the Registrable Notes included in such offering; PROVIDED, HOWEVER,
that such underwriters and managers must be reasonably satisfactory to the
Company.

       7. MISCELLANEOUS.

              (a) RULE 144 AND RULE 144A. For so long as the Company is subject
to the reporting requirements of Section 13 or 15 of the Exchange Act and any
Registrable Notes remain outstanding, the Company will file the reports required
to be filed by it under the Securities Act and Section 13(a) or 15(d) of the
Exchange Act and the rules and regulations adopted by the SEC thereunder;
PROVIDED, HOWEVER, that if the Company ceases to be so required to file such
reports, it will, upon the request of any Holder of Registrable Notes, (a) make
publicly available such information as is necessary to permit sales of its
securities pursuant to Rule 144 under the Securities Act, (b) deliver such
information to a prospective purchaser as is necessary to permit sales of its
securities pursuant to Rule 144A under the Securities Act, and (c) take such
further action that is reasonable in the circumstances, in each case, to the
extent required from time to time to enable such Holder to sell its Registrable
Notes without registration under the Securities Act within the limitation of the
exemptions provided by (i) Rule 144 under the Securities Act, as such rule may
be amended from time to time, (ii) Rule 144A under the Securities Act, as such
rule may be amended from time to time, or (iii) any similar rules or regulations
hereafter adopted by the SEC. Upon the request of any Holder of Registrable
Notes, the Company will deliver to such Holder a written statement as to whether
it has complied with such requirements.

                                       20

<PAGE>

              (b) NO INCONSISTENT AGREEMENTS. The Company has not entered into,
nor will the Company on or after the date of this Agreement enter into, any
agreement which is inconsistent with the rights granted to the Holders of
Registrable Notes in this Agreement or otherwise conflicts with the provisions
hereof without the written consent of Holders of a majority in aggregate
principal amount of the outstanding Registrable Notes. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Company's other issued and outstanding
securities under any such agreements.

              (c) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of Holders
of a majority in aggregate principal amount of the outstanding Registrable Notes
affected by such amendment, modification, supplement, waiver or departure;
PROVIDED that no amendment, modification or supplement or waiver or consent to
the departure with respect to the provisions of Section 4 hereof shall be
effective as against any Holder of Registrable Notes unless consented to in
writing by such Holder of Registrable Notes. Notwithstanding the foregoing
sentence, (i) this Agreement may be amended, without the consent of any Holder
of Registrable Notes, by written agreement signed by the Company and the
Representatives, to cure any ambiguity, correct or supplement any provision of
this Agreement that may be inconsistent with any other provision of this
Agreement or to make any other provisions with respect to matters or questions
arising under this Agreement which shall not be inconsistent with other
provisions of this Agreement, (ii) this Agreement may be amended, modified or
supplemented, and waivers and consents to departures from the provisions hereof
may be given, by written agreement signed by the Company and the Representatives
to the extent that any such amendment, modification, supplement, waiver or
consent is, in their reasonable judgment, necessary or appropriate to comply
with applicable law and regulation (including any interpretation of the Staff of
the SEC) or any change therein and (iii) to the extent any provision of this
Agreement relates to an Initial Purchaser, such provision may be amended,
modified or supplemented, and waivers or consents to departures from such
provisions may be given, by written agreement signed by such Initial Purchaser
and the Company.

              (d) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Company by means of a notice given in accordance with the provisions of this
Section 7(d), which address initially is, with respect to the Initial
Purchasers:

              Lehman Brothers Inc.
              745 Seventh Avenue
              New York, NY 10019
              Attention:  Debt Capital Markets Group

              Salomon Smith Barney Inc.
              388 Greenwich Street
              New York, NY  10013
              Attention:  Henry A. Clark III

                                       21

<PAGE>

and (ii) if to the Company, initially at the Company's address:

              AEP Texas Central Company
              c/o American Electric Power Service Corporation
              1 Riverside Plaza
              Columbus, OH  43215
              Attn:  A.A. Pena, Treasurer

and thereafter at such other address, notice of which is given in accordance
with the provisions of this Section 7(d).

              All such notices and communications shall be deemed to have been
duly given at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next Business Day, if timely delivered to an air courier guaranteeing
overnight delivery.

              Copies of all such notices, demands, or other communications shall
be concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.

              (e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of the
Initial Purchasers, including, without limitation and without the need for an
express assignment, subsequent Holders; PROVIDED, HOWEVER, that nothing herein
shall be deemed to permit any assignment, transfer or other disposition of
Registrable Notes in violation of the terms of the Purchase Agreement or the
Indenture. If any transferee of any Holder shall acquire Registrable Notes in
any manner, whether by operation of law or otherwise, such Registrable Notes
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Notes, such Person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement and such Person shall be entitled to receive the benefits hereof.

              (f) THIRD PARTY BENEFICIARIES. Each Holder of Registrable Notes
and Exchange Notes and any Participating Broker-Dealer shall be third party
beneficiaries of the agreements made hereunder among the Initial Purchasers and
the Company, and the Initial Purchasers shall have the right to enforce such
agreements directly to the extent it deems such enforcement necessary or
advisable to protect its rights or the rights of such holders hereunder.

              (g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

              (h) HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.

              (i) GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN
MADE IN THE STATE OF NEW YORK. THE VALIDITY AND

                                       22

<PAGE>

INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN,
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.

              (j) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.

              (k) NOTES HELD BY THE COMPANY OR ITS AFFILIATES. Whenever the
consent or approval of Holders of a specified percentage of Registrable Notes is
required hereunder, Registrable Notes held by the Company or its Affiliates
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.

                                       23
<PAGE>

              IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.

                                                AEP TEXAS CENTRAL COMPANY

                                                By:      /S/ SUSAN TOMASKY
                                                       Name:  Susan Tomasky
                                                       Title:    Vice President
Confirmed and accepted as of
the date first above written:

For themselves and as Representative of the
several Initial Purchasers

LEHMAN BROTHERS INC.

By:__/s/ Gregory J. Hall_____
     Name:  Gregory J. Hall
     Title:    Managing Director

SALOMON SMITH BARNEY INC.

By:__/s/ Yukari Saegusa_______
     Name:  Yukari Saegusa
     Title:    Vice President

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