-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D1sP5K1YVQUesMVQATqtZXmDkZ0ePsrygJyicdh3Dm3w4EpHl7HymD4XPP/BZu8E TlpPFv9/PZ+g27NKp89cEg== 0000004904-97-000113.txt : 19970912 0000004904-97-000113.hdr.sgml : 19970912 ACCESSION NUMBER: 0000004904-97-000113 CONFORMED SUBMISSION TYPE: U-9C-3 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970829 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN ELECTRIC POWER COMPANY INC CENTRAL INDEX KEY: 0000004904 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 134922640 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: U-9C-3 SEC ACT: SEC FILE NUMBER: 074-00015 FILM NUMBER: 97672946 BUSINESS ADDRESS: STREET 1: 1 RIVERSIDE PLZ CITY: COLUMBUS STATE: OH ZIP: 43215 BUSINESS PHONE: 6142231000 FORMER COMPANY: FORMER CONFORMED NAME: KINGSPORT UTILITIES INC DATE OF NAME CHANGE: 19660906 U-9C-3 1 File No. 074- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM U-9C-3 QUARTERLY REPORT For the quarter ended June 30, 1997 Filed Pursuant to Rule 58 of the Public Utility Holding Company Act of 1935 by AMERICAN ELECTRIC POWER COMPANY, INC. 1 Riverside Plaza, Columbus, Ohio 43215 AMERICAN ELECTRIC POWER COMPANY, INC. FORM U-9C-3 For the Quarter Ended June 30, 1997
CONTENTS Page ITEM 1 - Organization Chart 1 ITEM 2 - Issuances and Renewals of Securities and Capital Contributions 1 ITEM 3 - Associated Transactions 2 ITEM 4 - Summary of Aggregate Investment 3 ITEM 5 - Other Investments 3 ITEM 6 - Financial Statements and Exhibits 4 Statements of Income 5 Balance Sheet 6 Exhibits 7 /TABLE ITEM 1 - ORGANIZATION CHART
Name Energy or Percentage of Reporting gas-related Date of State of Of Voting Nature of Company Company Organization Organization Securities Held Business AEP Energy Services, Energy September 24, 1996 Ohio 100% To broker and market Inc. (AEPES) Energy commodities ITEM 2 - ISSUANCES AND RENEWALS OF SECURITIES AND CAPITAL CONTRIBUTIONS SECURITIES: Company Type of Principal Person to Collateral Consideration Issuing Security Amount of Issue or Cost of Whom Security Given With Received for Security Issued Security Renewal Capital Was Issued Security Each Security (in thousands) (in thousands) AEPES Short-term Variance Part of Debt $1,925 Issue N/A Financial AEP System $1,925 Institutions Joint Credit Facility CAPITAL CONTRIBUTIONS: Company Company Amount Contributing Receiving of Capital Capital Capital Contribution (in thousands) American Electric Power Company, Inc. AEPES $1,000
ITEM 3 - ASSOCIATED TRANSACTIONS Part I -- Transactions performed by reporting companies on behalf of associate companies
Reporting Associate Company Company Types of Direct Indirect Total Rendering Receiving Services Costs Costs Cost Amount Services Services Rendered Charged Charged of Capital Billed NONE Part II -- Transactions performed by associate companies on behalf of reporting companies Associate Reporting Company Company Types of Direct Indirect Total Rendering Receiving Services Costs Costs Cost Amount Services Services Rendered Charged Charged of Capital Billed (in thousands) American Electric Power Service Corporation AEPES Administrative and Marketing $1,638 $406 $ - $2,044 Kentucky Power Company AEPES Marketing 2 3 - 5 Ohio Power Company AEPES Marketing 12 13 - 25 Columbus Southern Power Company AEPES Marketing 12 13 - 25 AEP Resources Engineering & Services Company AEPES Marketing 16 3 - 19 Total $1,680 $438 $ - $2,118
ITEM 4 - SUMMARY OF AGGREGATE INVESTMENT
Investments in energy-related companies: (in thousands) Total consolidated capitalization as of June 30, 1997 $10,167,125 Line 1 Total capitalization multipled by 15% (line 1 multiplied by 0.15) 1,525,069 Line 2 Greater of $50 million or line 2 $1,525,069 Line 3 Total current aggregate investment: (categorized by major line of energy-related business) Energy-related business 28,525 Total current aggregate investment 28,525 Line 4 Difference between the greater of $50 million or 15% of capitalization and the total aggregate investment of the registered holding company system (line 3 less line 4) $1,496,544 Line 5 Investments in gas-related companies: NONE ITEM 5 - OTHER INVESTMENTS Major Line Other Other of Energy-Related Investment in Last Investment in This Reason for Difference in Business U-9C-3 Report U-9C-3 Report Other Investment NONE
ITEM 6 - FINANCIAL STATEMENTS AND EXHIBITS
List all financial statements and exhibits filed as a part of this report. Financial Statements: Statements of Income - filed under confidential treatment pursuant to Rule 104(b). Balance Sheet - filed under confidential treatment pursuant to Rule 104(b). Exhibits: 1. Service Agreements between AEP Energy Services, Inc. and Appalachian Power Company, Columbus Southern Power Company, Indiana Michigan Power Company, Kentucky Power Company, Kingsport Power Company, Ohio Power Company and Wheeling Power Company, respectively. 2. Copies of other contracts required by Item 3 - filed under confidential treatment pursuant to Rule 104(b). 3. Certificate stating that a copy of the U-9C-3 for the previous quarter has been filed with the Ohio, Kentucky, Virginia, West Virginia, Tennessee, Indiana and Michigan State Commissions. - NOT APPLICABLE.
SIGNATURE The undersigned system company has duly caused this quarterly report to be signed on its behalf by the undersigned, thereunto duly authorized, pursuant to the requirements of the Public Utility Holding Company Act of 1935. AMERICAN ELECTRIC POWER COMPANY, INC. By /s/ G.P. Maloney G.P. Maloney Vice President August 27, 1997 AGREEMENT BETWEEN INDIANA MICHIGAN POWER COMPANY and AEP ENERGY SOLUTIONS, INC. THIS AGREEMENT, made and entered into as of September 27, 1996 by and between INDIANA MICHIGAN POWER COMPANY, a corporation organized under the laws of the State of Indiana (hereinafter sometimes referred to as "Operating Company") and AEP ENERGY SOLUTIONS, INC., a corporation organized under the laws of the State of Ohio (hereinafter sometimes referred to as "Client Company"). W I T N E S S E T H : WHEREAS, both the Operating Company and the Client Company are associate companies in the American Electric Power System (hereinafter called the "System"), which is comprised of American Electric Power Company, Inc. (hereinafter called "American") and its subsidiary companies; and the Operating Company, which is a wholly-owned subsidiary of American, is an electric utility company within the meaning of Section 2(a)(3) of the Public Utility Holding Company Act of 1935 (hereinafter called the "1935 Act"), and maintains an organization of employees who are experienced in the problems and operations of public utilities and related businesses, together with appropriate facilities and equipment, and, in the course of its operations as an electric utility company, has acquired and will acquire certain properties and other resources; and WHEREAS, Client Company is authorized under the 1935 Act by order of the Securities and Exchange Commission dated September 13, 1996, to utilize those services, properties and resources of Operating Company, as well as those provided by other members of the American System, to broker and market energy commodities; and WHEREAS, economies and increased efficiencies will result from the performance by Operating Company of services for Client Company and the provision of certain property and resources to Client Company as herein provided; and WHEREAS, subject to the terms and conditions herein described, Operating Company is willing, upon request by Client Company, to render such services and provide such property and resources to Client Company at cost, determined in accordance with applicable rules, regulations and orders of the Commission under the 1935 Act; NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein, the parties hereto hereby agree as follows: ARTICLE I. AGREEMENT TO FURNISH SERVICES A. Upon its receipt of Client Company's work order or other request therefor, Operating Company will, if it has or can have available the personnel and resources needed to fill the work order or request, furnish to Client Company upon the terms and conditions hereinafter set forth services, for such periods and in such manner as Client Company may from time to time request (the "Services"); provided, however, that the determination of whether Operating Company has the available personnel and resources to perform in accordance with the work order or request will be entirely within the discretion of Operating Company, and Operating Company may at its option elect not to perform any requested Services, except that, once having agreed to perform pursuant to a work order or request, Operating Company cannot withdraw or depart from such performance without the consent of Client Company. B. The provision of Services by Operating Company pursuant to this Agreement shall in all cases and notwithstanding anything herein contained to the contrary be subject to any limitations contained in authorizations, rules or regulations of those governmental agencies, if any, having jurisdiction over Operating Company, Client Company, or such provision of Services. ARTICLE II. PROVISION OF PERSONNEL When specifically requested by Client Company, Operating Company may loan its employees to Client Company. In that event, such loaned employees will be under the sole supervision and control of Client Company for such period or periods of time as are necessary to complete the work to be performed by such employees. Such employees may be withdrawn by Operating Company from tasks assigned by Client Company only with the consent of Client Company, which consent will not be unreasonably withheld in the event of a demonstrable emergency requiring the use of such employees in another capacity for Operating Company. Client Company will be responsible for the actions and activities of such employees while engaged in the performance of the work to the same degree as though such persons were employees of Client Company; provided that such persons shall remain the employees of the Operating Company and nothing herein shall be construed as creating the employer-employee relationship between Client Company and such persons. Accordingly, as part of Services, Operating Company, during periods when such employees are loaned to Client Company, will continue to provide to such employees those same payroll, pension, savings, tax withholding, unemployment, bookkeeping and other personnel support services then being utilized by Operating Company in connection with compensating and benefiting such employees. ARTICLE III. COMPENSATION OF OPERATING COMPANY As compensation for services actually requested by Client Company and rendered to it by Operating Company, Client Company hereby agrees to pay to Operating Company the cost of such services computed in accordance with applicable rules and regulations (including Rules 90 and 91 under the 1935 Act) and accounting standards. As soon as practicable after the close of each month, Operating Company will issue to Client Company an invoice and detail of charges, and all amounts so billed shall be paid by Client Company within thirty days after receipt thereof. The cost of Services to be paid by Client Company shall include direct charges and Client Company's pro rata share of certain of Operating Company's costs, determined as set forth below: A. Direct Charges. To the extent that the costs incurred by Operating Company in connection with Services rendered by it to Client Company can be identified and related to a particular transaction, direct charges will be made by Operating Company to Client Company. B. Prorated Charges. Such costs incurred by Operating Company in connection with rendering Services to Client Company as cannot be identified and related to a particular transaction will be charged to Client Company in a fair and equitable manner. ARTICLE IV. WORK ORDERS The Services will be performed in accordance with work orders or requests issued or made by or on behalf of Client Company and accepted by Operating Company, and all services will be assigned an applicable work order number to enable specific work to be properly allocated by project or other appropriate basis. Work orders shall be as specific as practicable in defining the Services requested to be performed. Client Company shall have the right from time to time to amend, alter or rescind any work order, provided that (i) any such amendment or alteration which results in a material change in the scope of the work to be performed or equipment to be provided is agreed to by Operating Company; (ii) the costs for the Services covered by the work order will include any expense incurred by Operating Company as a direct result of such amendment, alteration or rescission of the work order; and (iii) no amendment, alteration or rescission of a work order will release Client Company from liability for all costs already incurred or contracted for by Operating Company pursuant to the work order, regardless of whether the work associated with such costs has been completed. ARTICLE V. LIMITATION OF LIABILITY AND INDEMNIFICATION A. In performing the Services hereunder (except to the extent such services are being performed by employees loaned to and under the supervision of Client Company), Operating Company will exercise due care to assure that the Services are performed in a workmanlike manner, meet the standards and specifications set forth in the applicable work order or request with respect to such services, and comply with applicable standards of law and regulation. However, failure to meet these obligations shall in no event subject Operating Company to any claims or liabilities other than to reperform the Services at cost so that they fully comply with the work order, request or standard, as the case may be. Operating Company makes no other warranty with respect to its performance of the Services, and Client Company agrees to accept such Services without further warranty of any nature. The Client Company shall indemnify and agree to save harmless and defend Operating Company from the payment of any sum or sums of money on account of, or resulting from, claims or suits growing out of (I) injuries to or the death of any person, (ii) damage to or loss of any property, and/or (iii) other damages in any way attributable to or arising out of the performance of any Service, whether or not the same results or allegedly results from the claimed or actual negligence or breach of warranty of, or wilful conduct by, Client Company or of its employees, agents or subcontractors or any combination thereof. Further, Client Company shall indemnify and agree to save harmless and defend Operating Company (a) from any and all liens, garnishments, attachments, claims, suits, costs, attorneys' fees, cost of investigation and of defense resulting from, incurred in connection with, or relating to any such claims; (b) from the payment of any such sum or sums of money; and (c) from the payment of any penalties, fines, damages, suits or claims (and any liens or attachments asserted in connection therewith) arising out of (i) any alleged or actual violation of law, court order, or governmental agency rule or regulation committed by or existing with respect to Client Company or its employees, agents or subcontractors (except Operating Company when not performing Services hereunder); (ii) any alleged or actual breaches of contract by Client Company; (iii) any claims made by or on account of any employee, agent or subcontractor (except Operating Company when not performing Services hereunder or an employee or agent of Operating Company where such claim does not arise specifically in connection with the performance of Services hereunder) of Client Company; or for (iv) services or labor performed, materials, provisions or supplies furnished or board of men which have been purchased or allegedly contracted for by or on behalf of the Client Company, its employees, agents or sub-contractors (except Operating Company when not performing services hereunder). B. The Operating Company shall within five business days after it receives notice of any claims, action, damages or liability against which it will expect to be indemnified pursuant to Article V(A), notify Client Company of such claims, actions, damages or liabilities. Thereafter, Client Company may at its own expense, upon notice to Operating Company, defend or participate in the defense of such action or claim or any negotiation for settlement of such action or claim, provided that unless Client Company proceeds promptly and in good faith to pay or defend such action or claim, then Operating Company shall have the right (but not the obligation), in good faith, upon ten days' notice to Client Company, to pay, settle, compromise or proceed to defend any such action or claim without the further participation by Client Company. Client Company will immediately pay (or reimburse Operating Company, as the case may be) any payments, settlements, compromises, judgments, costs or expenses made or incurred by Operating Company in or resulting from the pursuit by Operating Company of such right. If any judgment is rendered against Operating Company in any action defended by Client Company or from which Operating Company is otherwise entitled to indemnification under Article V(A), or any lien attached to the assets of Operating Company in connection therewith, Client Company immediately upon such entry or attachment shall pay the judgment in full or discharge any such lien unless, at its expense and direction, appeal shall be taken under which the execution of the judgment or satisfaction of the lien is stayed. If and when a final and unappealable judgment is rendered against Operating Company in any such action, Client Company shall forthwith pay such judgment or discharge such lien prior to the time that Operating Company would be legally held to do so. C. Client Company shall maintain at all times adequate levels of insurance to discharge financially its obligations under this Article V. ARTICLE VI. MISCELLANEOUS This Agreement shall be binding upon the successors and assigns of the parties hereto, provided that Operating Company shall not be entitled to assign or subcontract out any of its obligations under this Agreement or under any purchase order or work order issued hereunder without the prior written approval of Client Company. This Agreement may not be modified or amended in any respect except in writing executed by the parties hereto. This Agreement shall be construed and enforced under and in accordance with the laws of the State of Ohio. This Agreement may be executed in counterparts, each one of which when fully executed shall be deemed to have the same dignity, force and effect as if the original. No provision of this Agreement shall be deemed waived nor breach of this Agreement consented to unless waiver or consent is set forth in writing and executed by the party hereto making such waiver or consent. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written. INDIANA MICHIGAN POWER COMPANY By: ____________________ G.P. Maloney, Vice President AEP ENERGY SOLUTIONS, INC. By: _____________________ G.P. Maloney, Vice President AGREEMENT BETWEEN COLUMBUS SOUTHERN POWER COMPANY and AEP ENERGY SOLUTIONS, INC. THIS AGREEMENT, made and entered into as of September 27, 1996 by and between COLUMBUS SOUTHERN POWER COMPANY, a corporation organized under the laws of the State of Ohio (hereinafter sometimes referred to as "Operating Company") and AEP ENERGY SOLUTIONS, INC., a corporation organized under the laws of the State of Ohio (hereinafter sometimes referred to as "Client Company"). W I T N E S S E T H : WHEREAS, both the Operating Company and the Client Company are associate companies in the American Electric Power System (hereinafter called the "System"), which is comprised of American Electric Power Company, Inc. (hereinafter called "American") and its subsidiary companies; and the Operating Company, which is a wholly-owned subsidiary of American, is an electric utility company within the meaning of Section 2(a)(3) of the Public Utility Holding Company Act of 1935 (hereinafter called the "1935 Act"), and maintains an organization of employees who are experienced in the problems and operations of public utilities and related businesses, together with appropriate facilities and equipment, and, in the course of its operations as an electric utility company, has acquired and will acquire certain properties and other resources; and WHEREAS, Client Company is authorized under the 1935 Act by order of the Securities and Exchange Commission dated September 13, 1996, to utilize those services, properties and resources of Operating Company, as well as those provided by other members of the American System, to broker and market energy commodities; and WHEREAS, economies and increased efficiencies will result from the performance by Operating Company of services for Client Company and the provision of certain property and resources to Client Company as herein provided; and WHEREAS, subject to the terms and conditions herein described, Operating Company is willing, upon request by Client Company, to render such services and provide such property and resources to Client Company at cost, determined in accordance with applicable rules, regulations and orders of the Commission under the 1935 Act; NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein, the parties hereto hereby agree as follows: ARTICLE I. AGREEMENT TO FURNISH SERVICES A. Upon its receipt of Client Company's work order or other request therefor, Operating Company will, if it has or can have available the personnel and resources needed to fill the work order or request, furnish to Client Company upon the terms and conditions hereinafter set forth services, for such periods and in such manner as Client Company may from time to time request (the "Services"); provided, however, that the determination of whether Operating Company has the available personnel and resources to perform in accordance with the work order or request will be entirely within the discretion of Operating Company, and Operating Company may at its option elect not to perform any requested Services, except that, once having agreed to perform pursuant to a work order or request, Operating Company cannot withdraw or depart from such performance without the consent of Client Company. B. The provision of Services by Operating Company pursuant to this Agreement shall in all cases and notwithstanding anything herein contained to the contrary be subject to any limitations contained in authorizations, rules or regulations of those governmental agencies, if any, having jurisdiction over Operating Company, Client Company, or such provision of Services. ARTICLE II. PROVISION OF PERSONNEL When specifically requested by Client Company, Operating Company may loan its employees to Client Company. In that event, such loaned employees will be under the sole supervision and control of Client Company for such period or periods of time as are necessary to complete the work to be performed by such employees. Such employees may be withdrawn by Operating Company from tasks assigned by Client Company only with the consent of Client Company, which consent will not be unreasonably withheld in the event of a demonstrable emergency requiring the use of such employees in another capacity for Operating Company. Client Company will be responsible for the actions and activities of such employees while engaged in the performance of the work to the same degree as though such persons were employees of Client Company; provided that such persons shall remain the employees of the Operating Company and nothing herein shall be construed as creating the employer-employee relationship between Client Company and such persons. Accordingly, as part of Services, Operating Company, during periods when such employees are loaned to Client Company, will continue to provide to such employees those same payroll, pension, savings, tax withholding, unemployment, bookkeeping and other personnel support services then being utilized by Operating Company in connection with compensating and benefiting such employees. ARTICLE III. COMPENSATION OF OPERATING COMPANY As compensation for services actually requested by Client Company and rendered to it by Operating Company, Client Company hereby agrees to pay to Operating Company the cost of such services computed in accordance with applicable rules and regulations (including Rules 90 and 91 under the 1935 Act) and accounting standards. As soon as practicable after the close of each month, Operating Company will issue to Client Company an invoice and detail of charges, and all amounts so billed shall be paid by Client Company within thirty days after receipt thereof. The cost of Services to be paid by Client Company shall include direct charges and Client Company's pro rata share of certain of Operating Company's costs, determined as set forth below: A. Direct Charges. To the extent that the costs incurred by Operating Company in connection with Services rendered by it to Client Company can be identified and related to a particular transaction, direct charges will be made by Operating Company to Client Company. B. Prorated Charges. Such costs incurred by Operating Company in connection with rendering Services to Client Company as cannot be identified and related to a particular transaction will be charged to Client Company in a fair and equitable manner. ARTICLE IV. WORK ORDERS The Services will be performed in accordance with work orders or requests issued or made by or on behalf of Client Company and accepted by Operating Company, and all services will be assigned an applicable work order number to enable specific work to be properly allocated by project or other appropriate basis. Work orders shall be as specific as practicable in defining the Services requested to be performed. Client Company shall have the right from time to time to amend, alter or rescind any work order, provided that (i) any such amendment or alteration which results in a material change in the scope of the work to be performed or equipment to be provided is agreed to by Operating Company; (ii) the costs for the Services covered by the work order will include any expense incurred by Operating Company as a direct result of such amendment, alteration or rescission of the work order; and (iii) no amendment, alteration or rescission of a work order will release Client Company from liability for all costs already incurred or contracted for by Operating Company pursuant to the work order, regardless of whether the work associated with such costs has been completed. ARTICLE V. LIMITATION OF LIABILITY AND INDEMNIFICATION A. In performing the Services hereunder (except to the extent such services are being performed by employees loaned to and under the supervision of Client Company), Operating Company will exercise due care to assure that the Services are performed in a workmanlike manner, meet the standards and specifications set forth in the applicable work order or request with respect to such services, and comply with applicable standards of law and regulation. However, failure to meet these obligations shall in no event subject Operating Company to any claims or liabilities other than to reperform the Services at cost so that they fully comply with the work order, request or standard, as the case may be. Operating Company makes no other warranty with respect to its performance of the Services, and Client Company agrees to accept such Services without further warranty of any nature. The Client Company shall indemnify and agree to save harmless and defend Operating Company from the payment of any sum or sums of money on account of, or resulting from, claims or suits growing out of (I) injuries to or the death of any person, (ii) damage to or loss of any property, and/or (iii) other damages in any way attributable to or arising out of the performance of any Service, whether or not the same results or allegedly results from the claimed or actual negligence or breach of warranty of, or wilful conduct by, Client Company or of its employees, agents or subcontractors or any combination thereof. Further, Client Company shall indemnify and agree to save harmless and defend Operating Company (a) from any and all liens, garnishments, attachments, claims, suits, costs, attorneys' fees, cost of investigation and of defense resulting from, incurred in connection with, or relating to any such claims; (b) from the payment of any such sum or sums of money; and (c) from the payment of any penalties, fines, damages, suits or claims (and any liens or attachments asserted in connection therewith) arising out of (i) any alleged or actual violation of law, court order, or governmental agency rule or regulation committed by or existing with respect to Client Company or its employees, agents or subcontractors (except Operating Company when not performing Services hereunder); (ii) any alleged or actual breaches of contract by Client Company; (iii) any claims made by or on account of any employee, agent or subcontractor (except Operating Company when not performing Services hereunder or an employee or agent of Operating Company where such claim does not arise specifically in connection with the performance of Services hereunder) of Client Company; or for (iv) services or labor performed, materials, provisions or supplies furnished or board of men which have been purchased or allegedly contracted for by or on behalf of the Client Company, its employees, agents or sub-contractors (except Operating Company when not performing services hereunder). B. The Operating Company shall within five business days after it receives notice of any claims, action, damages or liability against which it will expect to be indemnified pursuant to Article V(A), notify Client Company of such claims, actions, damages or liabilities. Thereafter, Client Company may at its own expense, upon notice to Operating Company, defend or participate in the defense of such action or claim or any negotiation for settlement of such action or claim, provided that unless Client Company proceeds promptly and in good faith to pay or defend such action or claim, then Operating Company shall have the right (but not the obligation), in good faith, upon ten days' notice to Client Company, to pay, settle, compromise or proceed to defend any such action or claim without the further participation by Client Company. Client Company will immediately pay (or reimburse Operating Company, as the case may be) any payments, settlements, compromises, judgments, costs or expenses made or incurred by Operating Company in or resulting from the pursuit by Operating Company of such right. If any judgment is rendered against Operating Company in any action defended by Client Company or from which Operating Company is otherwise entitled to indemnification under Article V(A), or any lien attached to the assets of Operating Company in connection therewith, Client Company immediately upon such entry or attachment shall pay the judgment in full or discharge any such lien unless, at its expense and direction, appeal shall be taken under which the execution of the judgment or satisfaction of the lien is stayed. If and when a final and unappealable judgment is rendered against Operating Company in any such action, Client Company shall forthwith pay such judgment or discharge such lien prior to the time that Operating Company would be legally held to do so. C. Client Company shall maintain at all times adequate levels of insurance to discharge financially its obligations under this Article V. ARTICLE VI. MISCELLANEOUS This Agreement shall be binding upon the successors and assigns of the parties hereto, provided that Operating Company shall not be entitled to assign or subcontract out any of its obligations under this Agreement or under any purchase order or work order issued hereunder without the prior written approval of Client Company. This Agreement may not be modified or amended in any respect except in writing executed by the parties hereto. This Agreement shall be construed and enforced under and in accordance with the laws of the State of Ohio. This Agreement may be executed in counterparts, each one of which when fully executed shall be deemed to have the same dignity, force and effect as if the original. No provision of this Agreement shall be deemed waived nor breach of this Agreement consented to unless waiver or consent is set forth in writing and executed by the party hereto making such waiver or consent. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written. COLUMBUS SOUTHERN POWER COMPANY By: ____________________ A.A. Pena, Treasurer AEP ENERGY SOLUTIONS, INC. By: _____________________ A.A. Pena, Treasurer AGREEMENT BETWEEN KINGSPORT POWER COMPANY and AEP ENERGY SOLUTIONS, INC. THIS AGREEMENT, made and entered into as of September 27, 1996 by and between KINGSPORT POWER COMPANY, a corporation organized under the laws of the State of Tennessee (hereinafter sometimes referred to as "Operating Company") and AEP ENERGY SOLUTIONS, INC., a corporation organized under the laws of the State of Ohio (hereinafter sometimes referred to as "Client Company"). W I T N E S S E T H : WHEREAS, both the Operating Company and the Client Company are associate companies in the American Electric Power System (hereinafter called the "System"), which is comprised of American Electric Power Company, Inc. (hereinafter called "American") and its subsidiary companies; and the Operating Company, which is a wholly-owned subsidiary of American, is an electric utility company within the meaning of Section 2(a)(3) of the Public Utility Holding Company Act of 1935 (hereinafter called the "1935 Act"), and maintains an organization of employees who are experienced in the problems and operations of public utilities and related businesses, together with appropriate facilities and equipment, and, in the course of its operations as an electric utility company, has acquired and will acquire certain properties and other resources; and WHEREAS, Client Company is authorized under the 1935 Act by order of the Securities and Exchange Commission dated September 13, 1996, to utilize those services, properties and resources of Operating Company, as well as those provided by other members of the American System, to broker and market energy commodities; and WHEREAS, economies and increased efficiencies will result from the performance by Operating Company of services for Client Company and the provision of certain property and resources to Client Company as herein provided; and WHEREAS, subject to the terms and conditions herein described, Operating Company is willing, upon request by Client Company, to render such services and provide such property and resources to Client Company at cost, determined in accordance with applicable rules, regulations and orders of the Commission under the 1935 Act; NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein, the parties hereto hereby agree as follows: ARTICLE I. AGREEMENT TO FURNISH SERVICES A. Upon its receipt of Client Company's work order or other request therefor, Operating Company will, if it has or can have available the personnel and resources needed to fill the work order or request, furnish to Client Company upon the terms and conditions hereinafter set forth services, for such periods and in such manner as Client Company may from time to time request (the "Services"); provided, however, that the determination of whether Operating Company has the available personnel and resources to perform in accordance with the work order or request will be entirely within the discretion of Operating Company, and Operating Company may at its option elect not to perform any requested Services, except that, once having agreed to perform pursuant to a work order or request, Operating Company cannot withdraw or depart from such performance without the consent of Client Company. B. The provision of Services by Operating Company pursuant to this Agreement shall in all cases and notwithstanding anything herein contained to the contrary be subject to any limitations contained in authorizations, rules or regulations of those governmental agencies, if any, having jurisdiction over Operating Company, Client Company, or such provision of Services. ARTICLE II. PROVISION OF PERSONNEL When specifically requested by Client Company, Operating Company may loan its employees to Client Company. In that event, such loaned employees will be under the sole supervision and control of Client Company for such period or periods of time as are necessary to complete the work to be performed by such employees. Such employees may be withdrawn by Operating Company from tasks assigned by Client Company only with the consent of Client Company, which consent will not be unreasonably withheld in the event of a demonstrable emergency requiring the use of such employees in another capacity for Operating Company. Client Company will be responsible for the actions and activities of such employees while engaged in the performance of the work to the same degree as though such persons were employees of Client Company; provided that such persons shall remain the employees of the Operating Company and nothing herein shall be construed as creating the employer-employee relationship between Client Company and such persons. Accordingly, as part of Services, Operating Company, during periods when such employees are loaned to Client Company, will continue to provide to such employees those same payroll, pension, savings, tax withholding, unemployment, bookkeeping and other personnel support services then being utilized by Operating Company in connection with compensating and benefiting such employees. ARTICLE III. COMPENSATION OF OPERATING COMPANY As compensation for services actually requested by Client Company and rendered to it by Operating Company, Client Company hereby agrees to pay to Operating Company the cost of such services computed in accordance with applicable rules and regulations (including Rules 90 and 91 under the 1935 Act) and accounting standards. As soon as practicable after the close of each month, Operating Company will issue to Client Company an invoice and detail of charges, and all amounts so billed shall be paid by Client Company within thirty days after receipt thereof. The cost of Services to be paid by Client Company shall include direct charges and Client Company's pro rata share of certain of Operating Company's costs, determined as set forth below: A. Direct Charges. To the extent that the costs incurred by Operating Company in connection with Services rendered by it to Client Company can be identified and related to a particular transaction, direct charges will be made by Operating Company to Client Company. B. Prorated Charges. Such costs incurred by Operating Company in connection with rendering Services to Client Company as cannot be identified and related to a particular transaction will be charged to Client Company in a fair and equitable manner. ARTICLE IV. WORK ORDERS The Services will be performed in accordance with work orders or requests issued or made by or on behalf of Client Company and accepted by Operating Company, and all services will be assigned an applicable work order number to enable specific work to be properly allocated by project or other appropriate basis. Work orders shall be as specific as practicable in defining the Services requested to be performed. Client Company shall have the right from time to time to amend, alter or rescind any work order, provided that (i) any such amendment or alteration which results in a material change in the scope of the work to be performed or equipment to be provided is agreed to by Operating Company; (ii) the costs for the Services covered by the work order will include any expense incurred by Operating Company as a direct result of such amendment, alteration or rescission of the work order; and (iii) no amendment, alteration or rescission of a work order will release Client Company from liability for all costs already incurred or contracted for by Operating Company pursuant to the work order, regardless of whether the work associated with such costs has been completed. ARTICLE V. LIMITATION OF LIABILITY AND INDEMNIFICATION A. In performing the Services hereunder (except to the extent such services are being performed by employees loaned to and under the supervision of Client Company), Operating Company will exercise due care to assure that the Services are performed in a workmanlike manner, meet the standards and specifications set forth in the applicable work order or request with respect to such services, and comply with applicable standards of law and regulation. However, failure to meet these obligations shall in no event subject Operating Company to any claims or liabilities other than to reperform the Services at cost so that they fully comply with the work order, request or standard, as the case may be. Operating Company makes no other warranty with respect to its performance of the Services, and Client Company agrees to accept such Services without further warranty of any nature. The Client Company shall indemnify and agree to save harmless and defend Operating Company from the payment of any sum or sums of money on account of, or resulting from, claims or suits growing out of (I) injuries to or the death of any person, (ii) damage to or loss of any property, and/or (iii) other damages in any way attributable to or arising out of the performance of any Service, whether or not the same results or allegedly results from the claimed or actual negligence or breach of warranty of, or wilful conduct by, Client Company or of its employees, agents or subcontractors or any combination thereof. Further, Client Company shall indemnify and agree to save harmless and defend Operating Company (a) from any and all liens, garnishments, attachments, claims, suits, costs, attorneys' fees, cost of investigation and of defense resulting from, incurred in connection with, or relating to any such claims; (b) from the payment of any such sum or sums of money; and (c) from the payment of any penalties, fines, damages, suits or claims (and any liens or attachments asserted in connection therewith) arising out of (i) any alleged or actual violation of law, court order, or governmental agency rule or regulation committed by or existing with respect to Client Company or its employees, agents or subcontractors (except Operating Company when not performing Services hereunder); (ii) any alleged or actual breaches of contract by Client Company; (iii) any claims made by or on account of any employee, agent or subcontractor (except Operating Company when not performing Services hereunder or an employee or agent of Operating Company where such claim does not arise specifically in connection with the performance of Services hereunder) of Client Company; or for (iv) services or labor performed, materials, provisions or supplies furnished or board of men which have been purchased or allegedly contracted for by or on behalf of the Client Company, its employees, agents or sub-contractors (except Operating Company when not performing services hereunder). B. The Operating Company shall within five business days after it receives notice of any claims, action, damages or liability against which it will expect to be indemnified pursuant to Article V(A), notify Client Company of such claims, actions, damages or liabilities. Thereafter, Client Company may at its own expense, upon notice to Operating Company, defend or participate in the defense of such action or claim or any negotiation for settlement of such action or claim, provided that unless Client Company proceeds promptly and in good faith to pay or defend such action or claim, then Operating Company shall have the right (but not the obligation), in good faith, upon ten days' notice to Client Company, to pay, settle, compromise or proceed to defend any such action or claim without the further participation by Client Company. Client Company will immediately pay (or reimburse Operating Company, as the case may be) any payments, settlements, compromises, judgments, costs or expenses made or incurred by Operating Company in or resulting from the pursuit by Operating Company of such right. If any judgment is rendered against Operating Company in any action defended by Client Company or from which Operating Company is otherwise entitled to indemnification under Article V(A), or any lien attached to the assets of Operating Company in connection therewith, Client Company immediately upon such entry or attachment shall pay the judgment in full or discharge any such lien unless, at its expense and direction, appeal shall be taken under which the execution of the judgment or satisfaction of the lien is stayed. If and when a final and unappealable judgment is rendered against Operating Company in any such action, Client Company shall forthwith pay such judgment or discharge such lien prior to the time that Operating Company would be legally held to do so. C. Client Company shall maintain at all times adequate levels of insurance to discharge financially its obligations under this Article V. ARTICLE VI. MISCELLANEOUS This Agreement shall be binding upon the successors and assigns of the parties hereto, provided that Operating Company shall not be entitled to assign or subcontract out any of its obligations under this Agreement or under any purchase order or work order issued hereunder without the prior written approval of Client Company. This Agreement may not be modified or amended in any respect except in writing executed by the parties hereto. This Agreement shall be construed and enforced under and in accordance with the laws of the State of Ohio. This Agreement may be executed in counterparts, each one of which when fully executed shall be deemed to have the same dignity, force and effect as if the original. No provision of this Agreement shall be deemed waived nor breach of this Agreement consented to unless waiver or consent is set forth in writing and executed by the party hereto making such waiver or consent. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written. KINGSPORT POWER COMPANY By: ____________________ A.A. Pena, Treasurer AEP ENERGY SOLUTIONS, INC. By: _____________________ A.A. Pena, Treasurer AGREEMENT BETWEEN WHEELING POWER COMPANY and AEP ENERGY SOLUTIONS, INC. THIS AGREEMENT, made and entered into as of January 9, 1997 by and between WHEELING POWER COMPANY, a corporation organized under the laws of the State of West Virginia (hereinafter sometimes referred to as "Operating Company") and AEP ENERGY SOLUTIONS, INC., a corporation organized under the laws of the State of Ohio (hereinafter sometimes referred to as "Client Company"). W I T N E S S E T H : WHEREAS, both the Operating Company and the Client Company are associate companies in the American Electric Power System (hereinafter called the "System"), which is comprised of American Electric Power Company, Inc. (hereinafter called "American") and its subsidiary companies; and the Operating Company, which is a wholly-owned subsidiary of American, is an electric utility company within the meaning of Section 2(a)(3) of the Public Utility Holding Company Act of 1935 (hereinafter called the "1935 Act"), and maintains an organization of employees who are experienced in the problems and operations of public utilities and related businesses, together with appropriate facilities and equipment, and, in the course of its operations as an electric utility company, has acquired and will acquire certain properties and other resources; and WHEREAS, Client Company is authorized under the 1935 Act by order of the Securities and Exchange Commission dated September 13, 1996, to utilize those services, properties and resources of Operating Company, as well as those provided by other members of the American System, to broker and market energy commodities; and WHEREAS, economies and increased efficiencies will result from the performance by Operating Company of services for Client Company and the provision of certain property and resources to Client Company as herein provided; and WHEREAS, subject to the terms and conditions herein described, Operating Company is willing, upon request by Client Company, to render such services and provide such property and resources to Client Company at cost, determined in accordance with applicable rules, regulations and orders of the Commission under the 1935 Act; NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein, the parties hereto hereby agree as follows: ARTICLE I. AGREEMENT TO FURNISH SERVICES A. Upon its receipt of Client Company's work order or other request therefor, Operating Company will, if it has or can have available the personnel and resources needed to fill the work order or request, furnish to Client Company upon the terms and conditions hereinafter set forth services, for such periods and in such manner as Client Company may from time to time request (the "Services"); provided, however, that the determination of whether Operating Company has the available personnel and resources to perform in accordance with the work order or request will be entirely within the discretion of Operating Company, and Operating Company may at its option elect not to perform any requested Services, except that, once having agreed to perform pursuant to a work order or request, Operating Company cannot withdraw or depart from such performance without the consent of Client Company. B. The provision of Services by Operating Company pursuant to this Agreement shall in all cases and notwithstanding anything herein contained to the contrary be subject to any limitations contained in authorizations, rules or regulations of those governmental agencies, if any, having jurisdiction over Operating Company, Client Company, or such provision of Services. ARTICLE II. PROVISION OF PERSONNEL When specifically requested by Client Company, Operating Company may loan its employees to Client Company. In that event, such loaned employees will be under the sole supervision and control of Client Company for such period or periods of time as are necessary to complete the work to be performed by such employees. Such employees may be withdrawn by Operating Company from tasks assigned by Client Company only with the consent of Client Company, which consent will not be unreasonably withheld in the event of a demonstrable emergency requiring the use of such employees in another capacity for Operating Company. Client Company will be responsible for the actions and activities of such employees while engaged in the performance of the work to the same degree as though such persons were employees of Client Company; provided that such persons shall remain the employees of the Operating Company and nothing herein shall be construed as creating the employer-employee relationship between Client Company and such persons. Accordingly, as part of Services, Operating Company, during periods when such employees are loaned to Client Company, will continue to provide to such employees those same payroll, pension, savings, tax withholding, unemployment, bookkeeping and other personnel support services then being utilized by Operating Company in connection with compensating and benefiting such employees. ARTICLE III. COMPENSATION OF OPERATING COMPANY As compensation for services actually requested by Client Company and rendered to it by Operating Company, Client Company hereby agrees to pay to Operating Company the cost of such services computed in accordance with applicable rules and regulations (including Rules 90 and 91 under the 1935 Act) and accounting standards. As soon as practicable after the close of each month, Operating Company will issue to Client Company an invoice and detail of charges, and all amounts so billed shall be paid by Client Company within thirty days after receipt thereof. The cost of Services to be paid by Client Company shall include direct charges and Client Company's pro rata share of certain of Operating Company's costs, determined as set forth below: A. Direct Charges. To the extent that the costs incurred by Operating Company in connection with Services rendered by it to Client Company can be identified and related to a particular transaction, direct charges will be made by Operating Company to Client Company. B. Prorated Charges. Such costs incurred by Operating Company in connection with rendering Services to Client Company as cannot be identified and related to a particular transaction will be charged to Client Company in a fair and equitable manner. ARTICLE IV. WORK ORDERS The Services will be performed in accordance with work orders or requests issued or made by or on behalf of Client Company and accepted by Operating Company, and all services will be assigned an applicable work order number to enable specific work to be properly allocated by project or other appropriate basis. Work orders shall be as specific as practicable in defining the Services requested to be performed. Client Company shall have the right from time to time to amend, alter or rescind any work order, provided that (i) any such amendment or alteration which results in a material change in the scope of the work to be performed or equipment to be provided is agreed to by Operating Company; (ii) the costs for the Services covered by the work order will include any expense incurred by Operating Company as a direct result of such amendment, alteration or rescission of the work order; and (iii) no amendment, alteration or rescission of a work order will release Client Company from liability for all costs already incurred or contracted for by Operating Company pursuant to the work order, regardless of whether the work associated with such costs has been completed. ARTICLE V. LIMITATION OF LIABILITY AND INDEMNIFICATION A. In performing the Services hereunder (except to the extent such services are being performed by employees loaned to and under the supervision of Client Company), Operating Company will exercise due care to assure that the Services are performed in a workmanlike manner, meet the standards and specifications set forth in the applicable work order or request with respect to such services, and comply with applicable standards of law and regulation. However, failure to meet these obligations shall in no event subject Operating Company to any claims or liabilities other than to reperform the Services at cost so that they fully comply with the work order, request or standard, as the case may be. Operating Company makes no other warranty with respect to its performance of the Services, and Client Company agrees to accept such Services without further warranty of any nature. The Client Company shall indemnify and agree to save harmless and defend Operating Company from the payment of any sum or sums of money on account of, or resulting from, claims or suits growing out of (I) injuries to or the death of any person, (ii) damage to or loss of any property, and/or (iii) other damages in any way attributable to or arising out of the performance of any Service, whether or not the same results or allegedly results from the claimed or actual negligence or breach of warranty of, or wilful conduct by, Client Company or of its employees, agents or subcontractors or any combination thereof. Further, Client Company shall indemnify and agree to save harmless and defend Operating Company (a) from any and all liens, garnishments, attachments, claims, suits, costs, attorneys' fees, cost of investigation and of defense resulting from, incurred in connection with, or relating to any such claims; (b) from the payment of any such sum or sums of money; and (c) from the payment of any penalties, fines, damages, suits or claims (and any liens or attachments asserted in connection therewith) arising out of (i) any alleged or actual violation of law, court order, or governmental agency rule or regulation committed by or existing with respect to Client Company or its employees, agents or subcontractors (except Operating Company when not performing Services hereunder); (ii) any alleged or actual breaches of contract by Client Company; (iii) any claims made by or on account of any employee, agent or subcontractor (except Operating Company when not performing Services hereunder or an employee or agent of Operating Company where such claim does not arise specifically in connection with the performance of Services hereunder) of Client Company; or for (iv) services or labor performed, materials, provisions or supplies furnished or board of men which have been purchased or allegedly contracted for by or on behalf of the Client Company, its employees, agents or sub-contractors (except Operating Company when not performing services hereunder). B. The Operating Company shall within five business days after it receives notice of any claims, action, damages or liability against which it will expect to be indemnified pursuant to Article V(A), notify Client Company of such claims, actions, damages or liabilities. Thereafter, Client Company may at its own expense, upon notice to Operating Company, defend or participate in the defense of such action or claim or any negotiation for settlement of such action or claim, provided that unless Client Company proceeds promptly and in good faith to pay or defend such action or claim, then Operating Company shall have the right (but not the obligation), in good faith, upon ten days' notice to Client Company, to pay, settle, compromise or proceed to defend any such action or claim without the further participation by Client Company. Client Company will immediately pay (or reimburse Operating Company, as the case may be) any payments, settlements, compromises, judgments, costs or expenses made or incurred by Operating Company in or resulting from the pursuit by Operating Company of such right. If any judgment is rendered against Operating Company in any action defended by Client Company or from which Operating Company is otherwise entitled to indemnification under Article V(A), or any lien attached to the assets of Operating Company in connection therewith, Client Company immediately upon such entry or attachment shall pay the judgment in full or discharge any such lien unless, at its expense and direction, appeal shall be taken under which the execution of the judgment or satisfaction of the lien is stayed. If and when a final and unappealable judgment is rendered against Operating Company in any such action, Client Company shall forthwith pay such judgment or discharge such lien prior to the time that Operating Company would be legally held to do so. C. Client Company shall maintain at all times adequate levels of insurance to discharge financially its obligations under this Article V. ARTICLE VI. MISCELLANEOUS This Agreement shall be binding upon the successors and assigns of the parties hereto, provided that Operating Company shall not be entitled to assign or subcontract out any of its obligations under this Agreement or under any purchase order or work order issued hereunder without the prior written approval of Client Company. This Agreement may not be modified or amended in any respect except in writing executed by the parties hereto. This Agreement shall be construed and enforced under and in accordance with the laws of the State of Ohio. This Agreement may be executed in counterparts, each one of which when fully executed shall be deemed to have the same dignity, force and effect as if the original. No provision of this Agreement shall be deemed waived nor breach of this Agreement consented to unless waiver or consent is set forth in writing and executed by the party hereto making such waiver or consent. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written. WHEELING POWER COMPANY By: ____________________ A.A. Pena, Treasurer AEP ENERGY SOLUTIONS, INC. By: _____________________ A.A. Pena, Treasurer AGREEMENT BETWEEN KENTUCKY POWER COMPANY and AEP ENERGY SOLUTIONS, INC. THIS AGREEMENT, made and entered into as of September 27, 1996 by and between KENTUCKY POWER COMPANY, a corporation organized under the laws of the Commonwealth of Kentucky (hereinafter sometimes referred to as "Operating Company") and AEP ENERGY SOLUTIONS, INC., a corporation organized under the laws of the State of Ohio (hereinafter sometimes referred to as "Client Company"). W I T N E S S E T H : WHEREAS, both the Operating Company and the Client Company are associate companies in the American Electric Power System (hereinafter called the "System"), which is comprised of American Electric Power Company, Inc. (hereinafter called "American") and its subsidiary companies; and the Operating Company, which is a wholly-owned subsidiary of American, is an electric utility company within the meaning of Section 2(a)(3) of the Public Utility Holding Company Act of 1935 (hereinafter called the "1935 Act"), and maintains an organization of employees who are experienced in the problems and operations of public utilities and related businesses, together with appropriate facilities and equipment, and, in the course of its operations as an electric utility company, has acquired and will acquire certain properties and other resources; and WHEREAS, Client Company is authorized under the 1935 Act by order of the Securities and Exchange Commission dated September 13, 1996, to utilize those services, properties and resources of Operating Company, as well as those provided by other members of the American System, to broker and market energy commodities; and WHEREAS, economies and increased efficiencies will result from the performance by Operating Company of services for Client Company and the provision of certain property and resources to Client Company as herein provided; and WHEREAS, subject to the terms and conditions herein described, Operating Company is willing, upon request by Client Company, to render such services and provide such property and resources to Client Company at cost, determined in accordance with applicable rules, regulations and orders of the Commission under the 1935 Act; NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein, the parties hereto hereby agree as follows: ARTICLE I. AGREEMENT TO FURNISH SERVICES A. Upon its receipt of Client Company's work order or other request therefor, Operating Company will, if it has or can have available the personnel and resources needed to fill the work order or request, furnish to Client Company upon the terms and conditions hereinafter set forth services, for such periods and in such manner as Client Company may from time to time request (the "Services"); provided, however, that the determination of whether Operating Company has the available personnel and resources to perform in accordance with the work order or request will be entirely within the discretion of Operating Company, and Operating Company may at its option elect not to perform any requested Services, except that, once having agreed to perform pursuant to a work order or request, Operating Company cannot withdraw or depart from such performance without the consent of Client Company. B. The provision of Services by Operating Company pursuant to this Agreement shall in all cases and notwithstanding anything herein contained to the contrary be subject to any limitations contained in authorizations, rules or regulations of those governmental agencies, if any, having jurisdiction over Operating Company, Client Company, or such provision of Services. ARTICLE II. PROVISION OF PERSONNEL When specifically requested by Client Company, Operating Company may loan its employees to Client Company. In that event, such loaned employees will be under the sole supervision and control of Client Company for such period or periods of time as are necessary to complete the work to be performed by such employees. Such employees may be withdrawn by Operating Company from tasks assigned by Client Company only with the consent of Client Company, which consent will not be unreasonably withheld in the event of a demonstrable emergency requiring the use of such employees in another capacity for Operating Company. Client Company will be responsible for the actions and activities of such employees while engaged in the performance of the work to the same degree as though such persons were employees of Client Company; provided that such persons shall remain the employees of the Operating Company and nothing herein shall be construed as creating the employer-employee relationship between Client Company and such persons. Accordingly, as part of Services, Operating Company, during periods when such employees are loaned to Client Company, will continue to provide to such employees those same payroll, pension, savings, tax withholding, unemployment, bookkeeping and other personnel support services then being utilized by Operating Company in connection with compensating and benefiting such employees. ARTICLE III. COMPENSATION OF OPERATING COMPANY As compensation for services actually requested by Client Company and rendered to it by Operating Company, Client Company hereby agrees to pay to Operating Company the cost of such services computed in accordance with applicable rules and regulations (including Rules 90 and 91 under the 1935 Act) and accounting standards. As soon as practicable after the close of each month, Operating Company will issue to Client Company an invoice and detail of charges, and all amounts so billed shall be paid by Client Company within thirty days after receipt thereof. The cost of Services to be paid by Client Company shall include direct charges and Client Company's pro rata share of certain of Operating Company's costs, determined as set forth below: A. Direct Charges. To the extent that the costs incurred by Operating Company in connection with Services rendered by it to Client Company can be identified and related to a particular transaction, direct charges will be made by Operating Company to Client Company. B. Prorated Charges. Such costs incurred by Operating Company in connection with rendering Services to Client Company as cannot be identified and related to a particular transaction will be charged to Client Company in a fair and equitable manner. ARTICLE IV. WORK ORDERS The Services will be performed in accordance with work orders or requests issued or made by or on behalf of Client Company and accepted by Operating Company, and all services will be assigned an applicable work order number to enable specific work to be properly allocated by project or other appropriate basis. Work orders shall be as specific as practicable in defining the Services requested to be performed. Client Company shall have the right from time to time to amend, alter or rescind any work order, provided that (i) any such amendment or alteration which results in a material change in the scope of the work to be performed or equipment to be provided is agreed to by Operating Company; (ii) the costs for the Services covered by the work order will include any expense incurred by Operating Company as a direct result of such amendment, alteration or rescission of the work order; and (iii) no amendment, alteration or rescission of a work order will release Client Company from liability for all costs already incurred or contracted for by Operating Company pursuant to the work order, regardless of whether the work associated with such costs has been completed. ARTICLE V. LIMITATION OF LIABILITY AND INDEMNIFICATION A. In performing the Services hereunder (except to the extent such services are being performed by employees loaned to and under the supervision of Client Company), Operating Company will exercise due care to assure that the Services are performed in a workmanlike manner, meet the standards and specifications set forth in the applicable work order or request with respect to such services, and comply with applicable standards of law and regulation. However, failure to meet these obligations shall in no event subject Operating Company to any claims or liabilities other than to reperform the Services at cost so that they fully comply with the work order, request or standard, as the case may be. Operating Company makes no other warranty with respect to its performance of the Services, and Client Company agrees to accept such Services without further warranty of any nature. The Client Company shall indemnify and agree to save harmless and defend Operating Company from the payment of any sum or sums of money on account of, or resulting from, claims or suits growing out of (I) injuries to or the death of any person, (ii) damage to or loss of any property, and/or (iii) other damages in any way attributable to or arising out of the performance of any Service, whether or not the same results or allegedly results from the claimed or actual negligence or breach of warranty of, or wilful conduct by, Client Company or of its employees, agents or subcontractors or any combination thereof. Further, Client Company shall indemnify and agree to save harmless and defend Operating Company (a) from any and all liens, garnishments, attachments, claims, suits, costs, attorneys' fees, cost of investigation and of defense resulting from, incurred in connection with, or relating to any such claims; (b) from the payment of any such sum or sums of money; and (c) from the payment of any penalties, fines, damages, suits or claims (and any liens or attachments asserted in connection therewith) arising out of (i) any alleged or actual violation of law, court order, or governmental agency rule or regulation committed by or existing with respect to Client Company or its employees, agents or subcontractors (except Operating Company when not performing Services hereunder); (ii) any alleged or actual breaches of contract by Client Company; (iii) any claims made by or on account of any employee, agent or subcontractor (except Operating Company when not performing Services hereunder or an employee or agent of Operating Company where such claim does not arise specifically in connection with the performance of Services hereunder) of Client Company; or for (iv) services or labor performed, materials, provisions or supplies furnished or board of men which have been purchased or allegedly contracted for by or on behalf of the Client Company, its employees, agents or sub-contractors (except Operating Company when not performing services hereunder). B. The Operating Company shall within five business days after it receives notice of any claims, action, damages or liability against which it will expect to be indemnified pursuant to Article V(A), notify Client Company of such claims, actions, damages or liabilities. Thereafter, Client Company may at its own expense, upon notice to Operating Company, defend or participate in the defense of such action or claim or any negotiation for settlement of such action or claim, provided that unless Client Company proceeds promptly and in good faith to pay or defend such action or claim, then Operating Company shall have the right (but not the obligation), in good faith, upon ten days' notice to Client Company, to pay, settle, compromise or proceed to defend any such action or claim without the further participation by Client Company. Client Company will immediately pay (or reimburse Operating Company, as the case may be) any payments, settlements, compromises, judgments, costs or expenses made or incurred by Operating Company in or resulting from the pursuit by Operating Company of such right. If any judgment is rendered against Operating Company in any action defended by Client Company or from which Operating Company is otherwise entitled to indemnification under Article V(A), or any lien attached to the assets of Operating Company in connection therewith, Client Company immediately upon such entry or attachment shall pay the judgment in full or discharge any such lien unless, at its expense and direction, appeal shall be taken under which the execution of the judgment or satisfaction of the lien is stayed. If and when a final and unappealable judgment is rendered against Operating Company in any such action, Client Company shall forthwith pay such judgment or discharge such lien prior to the time that Operating Company would be legally held to do so. C. Client Company shall maintain at all times adequate levels of insurance to discharge financially its obligations under this Article V. ARTICLE VI. MISCELLANEOUS This Agreement shall be binding upon the successors and assigns of the parties hereto, provided that Operating Company shall not be entitled to assign or subcontract out any of its obligations under this Agreement or under any purchase order or work order issued hereunder without the prior written approval of Client Company. This Agreement may not be modified or amended in any respect except in writing executed by the parties hereto. This Agreement shall be construed and enforced under and in accordance with the laws of the State of Ohio. This Agreement may be executed in counterparts, each one of which when fully executed shall be deemed to have the same dignity, force and effect as if the original. No provision of this Agreement shall be deemed waived nor breach of this Agreement consented to unless waiver or consent is set forth in writing and executed by the party hereto making such waiver or consent. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written. KENTUCKY POWER COMPANY By: ____________________ A.A. Pena, Treasurer AEP ENERGY SOLUTIONS, INC. By: _____________________ A.A. Pena, Treasurer AGREEMENT BETWEEN OHIO POWER COMPANY and AEP ENERGY SOLUTIONS, INC. THIS AGREEMENT, made and entered into as of September 27, 1996 by and between OHIO POWER COMPANY, a corporation organized under the laws of the State of Ohio (hereinafter sometimes referred to as "Operating Company") and AEP ENERGY SOLUTIONS, INC., a corporation organized under the laws of the State of Ohio (hereinafter sometimes referred to as "Client Company"). W I T N E S S E T H : WHEREAS, both the Operating Company and the Client Company are associate companies in the American Electric Power System (hereinafter called the "System"), which is comprised of American Electric Power Company, Inc. (hereinafter called "American") and its subsidiary companies; and the Operating Company, which is a wholly-owned subsidiary of American, is an electric utility company within the meaning of Section 2(a)(3) of the Public Utility Holding Company Act of 1935 (hereinafter called the "1935 Act"), and maintains an organization of employees who are experienced in the problems and operations of public utilities and related businesses, together with appropriate facilities and equipment, and, in the course of its operations as an electric utility company, has acquired and will acquire certain properties and other resources; and WHEREAS, Client Company is authorized under the 1935 Act by order of the Securities and Exchange Commission dated September 13, 1996, to utilize those services, properties and resources of Operating Company, as well as those provided by other members of the American System, to broker and market energy commodities; and WHEREAS, economies and increased efficiencies will result from the performance by Operating Company of services for Client Company and the provision of certain property and resources to Client Company as herein provided; and WHEREAS, subject to the terms and conditions herein described, Operating Company is willing, upon request by Client Company, to render such services and provide such property and resources to Client Company at cost, determined in accordance with applicable rules, regulations and orders of the Commission under the 1935 Act; NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein, the parties hereto hereby agree as follows: ARTICLE I. AGREEMENT TO FURNISH SERVICES A. Upon its receipt of Client Company's work order or other request therefor, Operating Company will, if it has or can have available the personnel and resources needed to fill the work order or request, furnish to Client Company upon the terms and conditions hereinafter set forth services, for such periods and in such manner as Client Company may from time to time request (the "Services"); provided, however, that the determination of whether Operating Company has the available personnel and resources to perform in accordance with the work order or request will be entirely within the discretion of Operating Company, and Operating Company may at its option elect not to perform any requested Services, except that, once having agreed to perform pursuant to a work order or request, Operating Company cannot withdraw or depart from such performance without the consent of Client Company. B. The provision of Services by Operating Company pursuant to this Agreement shall in all cases and notwithstanding anything herein contained to the contrary be subject to any limitations contained in authorizations, rules or regulations of those governmental agencies, if any, having jurisdiction over Operating Company, Client Company, or such provision of Services. ARTICLE II. PROVISION OF PERSONNEL When specifically requested by Client Company, Operating Company may loan its employees to Client Company. In that event, such loaned employees will be under the sole supervision and control of Client Company for such period or periods of time as are necessary to complete the work to be performed by such employees. Such employees may be withdrawn by Operating Company from tasks assigned by Client Company only with the consent of Client Company, which consent will not be unreasonably withheld in the event of a demonstrable emergency requiring the use of such employees in another capacity for Operating Company. Client Company will be responsible for the actions and activities of such employees while engaged in the performance of the work to the same degree as though such persons were employees of Client Company; provided that such persons shall remain the employees of the Operating Company and nothing herein shall be construed as creating the employer-employee relationship between Client Company and such persons. Accordingly, as part of Services, Operating Company, during periods when such employees are loaned to Client Company, will continue to provide to such employees those same payroll, pension, savings, tax withholding, unemployment, bookkeeping and other personnel support services then being utilized by Operating Company in connection with compensating and benefiting such employees. ARTICLE III. COMPENSATION OF OPERATING COMPANY As compensation for services actually requested by Client Company and rendered to it by Operating Company, Client Company hereby agrees to pay to Operating Company the cost of such services computed in accordance with applicable rules and regulations (including Rules 90 and 91 under the 1935 Act) and accounting standards. As soon as practicable after the close of each month, Operating Company will issue to Client Company an invoice and detail of charges, and all amounts so billed shall be paid by Client Company within thirty days after receipt thereof. The cost of Services to be paid by Client Company shall include direct charges and Client Company's pro rata share of certain of Operating Company's costs, determined as set forth below: A. Direct Charges. To the extent that the costs incurred by Operating Company in connection with Services rendered by it to Client Company can be identified and related to a particular transaction, direct charges will be made by Operating Company to Client Company. B. Prorated Charges. Such costs incurred by Operating Company in connection with rendering Services to Client Company as cannot be identified and related to a particular transaction will be charged to Client Company in a fair and equitable manner. ARTICLE IV. WORK ORDERS The Services will be performed in accordance with work orders or requests issued or made by or on behalf of Client Company and accepted by Operating Company, and all services will be assigned an applicable work order number to enable specific work to be properly allocated by project or other appropriate basis. Work orders shall be as specific as practicable in defining the Services requested to be performed. Client Company shall have the right from time to time to amend, alter or rescind any work order, provided that (i) any such amendment or alteration which results in a material change in the scope of the work to be performed or equipment to be provided is agreed to by Operating Company; (ii) the costs for the Services covered by the work order will include any expense incurred by Operating Company as a direct result of such amendment, alteration or rescission of the work order; and (iii) no amendment, alteration or rescission of a work order will release Client Company from liability for all costs already incurred or contracted for by Operating Company pursuant to the work order, regardless of whether the work associated with such costs has been completed. ARTICLE V. LIMITATION OF LIABILITY AND INDEMNIFICATION A. In performing the Services hereunder (except to the extent such services are being performed by employees loaned to and under the supervision of Client Company), Operating Company will exercise due care to assure that the Services are performed in a workmanlike manner, meet the standards and specifications set forth in the applicable work order or request with respect to such services, and comply with applicable standards of law and regulation. However, failure to meet these obligations shall in no event subject Operating Company to any claims or liabilities other than to reperform the Services at cost so that they fully comply with the work order, request or standard, as the case may be. Operating Company makes no other warranty with respect to its performance of the Services, and Client Company agrees to accept such Services without further warranty of any nature. The Client Company shall indemnify and agree to save harmless and defend Operating Company from the payment of any sum or sums of money on account of, or resulting from, claims or suits growing out of (I) injuries to or the death of any person, (ii) damage to or loss of any property, and/or (iii) other damages in any way attributable to or arising out of the performance of any Service, whether or not the same results or allegedly results from the claimed or actual negligence or breach of warranty of, or wilful conduct by, Client Company or of its employees, agents or subcontractors or any combination thereof. Further, Client Company shall indemnify and agree to save harmless and defend Operating Company (a) from any and all liens, garnishments, attachments, claims, suits, costs, attorneys' fees, cost of investigation and of defense resulting from, incurred in connection with, or relating to any such claims; (b) from the payment of any such sum or sums of money; and (c) from the payment of any penalties, fines, damages, suits or claims (and any liens or attachments asserted in connection therewith) arising out of (i) any alleged or actual violation of law, court order, or governmental agency rule or regulation committed by or existing with respect to Client Company or its employees, agents or subcontractors (except Operating Company when not performing Services hereunder); (ii) any alleged or actual breaches of contract by Client Company; (iii) any claims made by or on account of any employee, agent or subcontractor (except Operating Company when not performing Services hereunder or an employee or agent of Operating Company where such claim does not arise specifically in connection with the performance of Services hereunder) of Client Company; or for (iv) services or labor performed, materials, provisions or supplies furnished or board of men which have been purchased or allegedly contracted for by or on behalf of the Client Company, its employees, agents or sub-contractors (except Operating Company when not performing services hereunder). B. The Operating Company shall within five business days after it receives notice of any claims, action, damages or liability against which it will expect to be indemnified pursuant to Article V(A), notify Client Company of such claims, actions, damages or liabilities. Thereafter, Client Company may at its own expense, upon notice to Operating Company, defend or participate in the defense of such action or claim or any negotiation for settlement of such action or claim, provided that unless Client Company proceeds promptly and in good faith to pay or defend such action or claim, then Operating Company shall have the right (but not the obligation), in good faith, upon ten days' notice to Client Company, to pay, settle, compromise or proceed to defend any such action or claim without the further participation by Client Company. Client Company will immediately pay (or reimburse Operating Company, as the case may be) any payments, settlements, compromises, judgments, costs or expenses made or incurred by Operating Company in or resulting from the pursuit by Operating Company of such right. If any judgment is rendered against Operating Company in any action defended by Client Company or from which Operating Company is otherwise entitled to indemnification under Article V(A), or any lien attached to the assets of Operating Company in connection therewith, Client Company immediately upon such entry or attachment shall pay the judgment in full or discharge any such lien unless, at its expense and direction, appeal shall be taken under which the execution of the judgment or satisfaction of the lien is stayed. If and when a final and unappealable judgment is rendered against Operating Company in any such action, Client Company shall forthwith pay such judgment or discharge such lien prior to the time that Operating Company would be legally held to do so. C. Client Company shall maintain at all times adequate levels of insurance to discharge financially its obligations under this Article V. ARTICLE VI. MISCELLANEOUS This Agreement shall be binding upon the successors and assigns of the parties hereto, provided that Operating Company shall not be entitled to assign or subcontract out any of its obligations under this Agreement or under any purchase order or work order issued hereunder without the prior written approval of Client Company. This Agreement may not be modified or amended in any respect except in writing executed by the parties hereto. This Agreement shall be construed and enforced under and in accordance with the laws of the State of Ohio. This Agreement may be executed in counterparts, each one of which when fully executed shall be deemed to have the same dignity, force and effect as if the original. No provision of this Agreement shall be deemed waived nor breach of this Agreement consented to unless waiver or consent is set forth in writing and executed by the party hereto making such waiver or consent. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written. OHIO POWER COMPANY By: ____________________ A.A. Pena, Treasurer AEP ENERGY SOLUTIONS, INC. By: _____________________ A.A. Pena, Treasurer AGREEMENT BETWEEN APPALACHIAN POWER COMPANY and AEP ENERGY SERVICES, INC. (formerly AEP ENERGY SOLUTIONS, INC.) THIS AGREEMENT, made and entered into as of March 6, 1997 by and between APPALACHIAN POWER COMPANY, a corporation organized under the laws of the Commonwealth of Virginia (hereinafter some- times referred to as "Operating Company") and AEP ENERGY SERVICES, INC. (formerly AEP Energy Solutions, Inc.), a corporation organized under the laws of the State of Ohio (hereinafter sometimes referred to as "Client Company"). W I T N E S S E T H : WHEREAS, both the Operating Company and the Client Company are associate companies in the American Electric Power System (herein- after called the "System"), which is comprised of American Electric Power Company, Inc. (hereinafter called "American") and its subsid- iary companies; and the Operating Company, which is a wholly-owned subsidiary of American, is an electric utility company within the meaning of Section 2(a)(3) of the Public Utility Holding Company Act of 1935 (hereinafter called the "1935 Act"), and maintains an organization of employees who are experienced in the problems and operations of public utilities and related businesses, together with appropriate facilities and equipment, and, in the course of its operations as an electric utility company, has acquired and will acquire certain properties and other resources; and WHEREAS, Client Company is authorized under the 1935 Act by order of the Securities and Exchange Commission dated September 13, 1996, to utilize those services, properties and resources of Operating Company, as well as those provided by other members of the American System, to broker and market energy commodities; and WHEREAS, economies and increased efficiencies will result from the performance by Operating Company of services for Client Company and the provision of certain property and resources to Client Company as herein provided; and WHEREAS, subject to the terms and conditions herein described, Operating Company is willing, upon request by Client Company, to render such services and provide such property and resources to Client Company at cost, determined in accordance with applicable rules, regulations and orders of the Commission under the 1935 Act; NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein, the parties hereto hereby agree as follows: ARTICLE I. AGREEMENT TO FURNISH SERVICES A. Upon its receipt of Client Company's work order or other request therefor, Operating Company will, if it has or can have available the personnel and resources needed to fill the work order or request, furnish to Client Company upon the terms and conditions hereinafter set forth services, for such periods and in such manner as Client Company may from time to time request (the "Services"); provided, however, that the determination of whether Operating Company has the available personnel and resources to perform in accordance with the work order or request will be entirely within the discretion of Operating Company, and Operating Company may at its option elect not to perform any requested Services, except that, once having agreed to perform pursuant to a work order or request, Operating Company cannot withdraw or depart from such per- formance without the consent of Client Company. B. The provision of Services by Operating Company pursuant to this Agreement shall in all cases and notwithstanding anything herein contained to the contrary be subject to any limitations contained in authorizations, rules or regulations of those govern- mental agencies, if any, having jurisdiction over Operating Company, Client Company, or such provision of Services. ARTICLE II. PROVISION OF PERSONNEL When specifically requested by Client Company, Operating Company may loan its employees to Client Company. In that event, such loaned employees will be under the sole supervision and con- trol of Client Company for such period or periods of time as are necessary to complete the work to be performed by such employees. Such employees may be withdrawn by Operating Company from tasks assigned by Client Company only with the consent of Client Company, which consent will not be unreasonably withheld in the event of a demonstrable emergency requiring the use of such employees in another capacity for Operating Company. Client Company will be responsible for the actions and activities of such employees while engaged in the performance of the work to the same degree as though such persons were employees of Client Company; provided that such persons shall remain the employees of the Operating Company and nothing herein shall be construed as creating the employer-employee relationship between Client Company and such persons. Accordingly, as part of Services, Operating Company, during periods when such employees are loaned to Client Company, will continue to provide to such employees those same payroll, pension, savings, tax with- holding, unemployment, bookkeeping and other personnel support services then being utilized by Operating Company in connection with compensating and benefiting such employees. ARTICLE III. COMPENSATION OF OPERATING COMPANY As compensation for services actually requested by Client Company and rendered to it by Operating Company, Client Company hereby agrees to pay to Operating Company the cost of such services computed in accordance with applicable rules and regulations (including Rules 90 and 91 under the 1935 Act) and accounting standards. As soon as practicable after the close of each month, Operating Company will issue to Client Company an invoice and detail of charges, and all amounts so billed shall be paid by Client Company within thirty days after receipt thereof. The cost of Services to be paid by Client Company shall include direct charges and Client Company's pro rata share of certain of Operating Company's costs, determined as set forth below: A. Direct Charges. To the extent that the costs incurred by Operating Company in connection with Services rendered by it to Client Company can be identified and related to a particular trans- action, direct charges will be made by Operating Company to Client Company. B. Prorated Charges. Such costs incurred by Operating Com- pany in connection with rendering Services to Client Company as cannot be identified and related to a particular transaction will be charged to Client Company in a fair and equitable manner. ARTICLE IV. WORK ORDERS The Services will be performed in accordance with work orders or requests issued or made by or on behalf of Client Company and accepted by Operating Company, and all services will be assigned an applicable work order number to enable specific work to be properly allocated by project or other appropriate basis. Work orders shall be as specific as practicable in defining the Services requested to be performed. Client Company shall have the right from time to time to amend, alter or rescind any work order, provided that (i) any such amendment or alteration which results in a material change in the scope of the work to be performed or equipment to be pro- vided is agreed to by Operating Company; (ii) the costs for the Services covered by the work order will include any expense incurred by Operating Company as a direct result of such amendment, alteration or rescission of the work order; and (iii) no amendment, alteration or rescission of a work order will release Client Com- pany from liability for all costs already incurred or contracted for by Operating Company pursuant to the work order, regardless of whether the work associated with such costs has been completed. ARTICLE V. LIMITATION OF LIABILITY AND INDEMNIFICATION A. In performing the Services hereunder (except to the extent such services are being performed by employees loaned to and under the supervision of Client Company), Operating Company will exercise due care to assure that the Services are performed in a workmanlike manner, meet the standards and specifications set forth in the applicable work order or request with respect to such ser- vices, and comply with applicable standards of law and regulation. However, failure to meet these obligations shall in no event sub- ject Operating Company to any claims or liabilities other than to reperform the Services at cost so that they fully comply with the work order, request or standard, as the case may be. Operating Company makes no other warranty with respect to its performance of the Services, and Client Company agrees to accept such Services without further warranty of any nature. The Client Company shall indemnify and agree to save harmless and defend Operating Company from the payment of any sum or sums of money on account of, or re- sulting from, claims or suits growing out of (i) injuries to or the death of any person, (ii) damage to or loss of any property, and/or (iii) other damages in any way attributable to or arising out of the performance of any Service, whether or not the same results or allegedly results from the claimed or actual negligence or breach of warranty of, or wilful conduct by, Client Company or of its employees, agents or subcontractors or any combination thereof. Further, Client Company shall indemnify and agree to save harmless and defend Operating Company (a) from any and all liens, garnish- ments, attachments, claims, suits, costs, attorneys' fees, cost of investigation and of defense resulting from, incurred in connection with, or relating to any such claims; (b) from the payment of any such sum or sums of money; and (c) from the payment of any penal- ties, fines, damages, suits or claims (and any liens or attachments asserted in connection therewith) arising out of (i) any alleged or actual violation of law, court order, or governmental agency rule or regulation committed by or existing with respect to Client Com- pany or its employees, agents or subcontractors (except Operating Company when not performing Services hereunder); (ii) any alleged or actual breaches of contract by Client Company; (iii) any claims made by or on account of any employee, agent or subcontractor (ex- cept Operating Company when not performing Services hereunder or an employee or agent of Operating Company where such claim does not arise specifically in connection with the performance of Services hereunder) of Client Company; or for (iv) services or labor per- formed, materials, provisions or supplies furnished or board of men which have been purchased or allegedly contracted for by or on be half of the Client Company, its employees, agents or subcontractors (except Operating Company when not performing services hereunder). B. The Operating Company shall within five business days after it receives notice of any claims, action, damages or liabil- ity against which it will expect to be indemnified pursuant to Article V(A), notify Client Company of such claims, actions, damages or liabilities. Thereafter, Client Company may at its own expense, upon notice to Operating Company, defend or participate in the defense of such action or claim or any negotiation for settle- ment of such action or claim, provided that unless Client Company proceeds promptly and in good faith to pay or defend such action or claim, then Operating Company shall have the right (but not the obligation), in good faith, upon ten days' notice to Client Com- pany, to pay, settle, compromise or proceed to defend any such action or claim without the further participation by Client Company. Client Company will immediately pay (or reimburse Operating Company, as the case may be) any payments, settlements, compromises, judgments, costs or expenses made or incurred by Oper- ating Company in or resulting from the pursuit by Operating Company of such right. If any judgment is rendered against Operating Company in any action defended by Client Company or from which Operating Company is otherwise entitled to indemnification under Article V(A), or any lien attached to the assets of Operating Company in connection therewith, Client Company immediately upon such entry or attachment shall pay the judgment in full or dis charge any such lien unless, at its expense and direction, appeal shall be taken under which the execution of the judgment or satis- faction of the lien is stayed. If and when a final and unappeal- able judgment is rendered against Operating Company in any such action, Client Company shall forthwith pay such judgment or dis- charge such lien prior to the time that Operating Company would be legally held to do so. C. Client Company shall maintain at all times adequate levels of insurance to discharge financially its obligations under this Article V. ARTICLE VI. MISCELLANEOUS This Agreement shall be binding upon the successors and assigns of the parties hereto, provided that Operating Company shall not be entitled to assign or subcontract out any of its obli- gations under this Agreement or under any purchase order or work order issued hereunder without the prior written approval of Client Company. This Agreement may not be modified or amended in any respect except in writing executed by the parties hereto. This Agreement shall be construed and enforced under and in accordance with the laws of the State of Ohio. This Agreement may be executed in counterparts, each one of which when fully executed shall be deemed to have the same dignity, force and effect as if the origi- nal. No provision of this Agreement shall be deemed waived nor breach of this Agreement consented to unless waiver or consent is set forth in writing and executed by the party hereto making such waiver or consent. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written. APPALACHIAN POWER COMPANY By: G. P. Maloney Vice President AEP ENERGY SERVICES, INC. By: G. P. Maloney Vice President -----END PRIVACY-ENHANCED MESSAGE-----