-----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, AJ9jYXF89Z1QjiTTA4dC+0mn5gERxkzsYWu3EoObog9+xxdQnQ2df9IoE1RUYRLC A4YjOKsmbfgqKd1ovSFG8w== 0001021408-02-008243.txt : 20020611 0001021408-02-008243.hdr.sgml : 20020611 20020611124250 ACCESSION NUMBER: 0001021408-02-008243 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20020605 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020611 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN ELECTRIC POWER CO 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03525 FILM NUMBER: 02676255 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 8-K 1 d8k.txt AMERICAN ELECTRIC POWER - FORM 8K SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): June 5, 2002 AMERICAN ELECTRIC POWER COMPANY, INC. (Exact Name of Registrant as Specified in Its Charter) New York 1-3525 13-4922640 (State or other Jurisdiction (Commission File Number) (I.R.S. Employer of Incorporation) Identification No.) 1 Riverside Plaza, Columbus, Ohio 43215 (Address of principal executive offices) (Zip Code) - ---------------------------------------- (614) 223-1000 (Registrant's Telephone Number, Including Area Code) N/A (Former Name or Former Address, if Changed Since Last Report) Item 5. Other Events and Regulation FD Disclosure On June 5, 2002, American Electric Power Company, Inc. (the "Company") entered into an Underwriting Agreement with Goldman, Sachs & Co., J.P. Morgan Securities Inc. and Salomon Smith Barney Inc., as representatives of the several underwriters named therein, relating to the offering and sale by the Company of up to 6,900,000 Equity Units. Each Equity Unit initially consists of (i) a forward purchase contract under which the holder agrees to purchase from the Company and the Company agrees to sell shares of its common stock, par value $6.50 per share, on August 16, 2005 and (ii) a 5.75% senior note due August 16, 2007 of the Company. The number of shares of common stock to be issued on the stock purchase date will be between 1.0187 and 1.2225 shares per Equity Units depending on the 20-trading day average closing price of the Company's common stock prior to the stock purchase date. On June 6, 2002, the Company filed a Prospectus Supplement relating to the offering of Equity Units, dated June 5, 2002, to the Prospectus dated May 17, 2002 (the "Prospectus"), included as part of the Registration Statement on Form S-3 of the Company, AEP Capital Trust I, AEP Capital Trust II and AEP Capital Trust III (File Nos. 333-86050, 333-86050-1, 333-86050-2 and 333-86050-3). On June 5, 2002, American Electric Power Company, Inc. (the "Company") entered into an Underwriting Agreement with Goldman, Sachs & Co., J.P. Morgan Securities Inc. and Salomon Smith Barney Inc., as representatives of the several underwriters named therein, relating to the offering and sale by the Company of up to 18,400,000 shares of the Company's common stock. On June 6, 2002, the Company filed a Prospectus Supplement relating to the offering of common stock, dated June 5, 2002, to the Prospectus dated May 17, 2002 (the "Prospectus"), included as part of the Registration Statement on Form S-3 of the Company, AEP Capital Trust I, AEP Capital Trust II and AEP Capital Trust III (File Nos. 333-86050, 333-86050-1, 333-86050-2 and 333-86050-3). In connection with the offering and sale of the Equity Units, the Company finalized certain agreements relating to the Equity Units that had been previously filed in draft form. The final forms of those agreements and certain other agreements relating to the Equity Units are filed herewith as exhibits, as set forth in Item 7 hereof. Item 7. Financial Statements and Exhibits (c) Exhibits 1.1 Underwriting Agreement, dated June 5, 2002, between the Company and Goldman, Sachs & Co., J.P. Morgan Securities Inc. and Salomon Smith Barney Inc., as representatives of the several underwriters named in Exhibit 1 thereto in connection with the offer and sale of 6,000,000 Equity Units. 1.2 Underwriting Agreement, dated June 5, 2002, between the Company and Goldman, Sachs & Co., J.P. Morgan Securities Inc. and Salomon Smith Barney Inc., as representatives of the several underwriters named in Exhibit 1 thereto in connection with the offer and sale of 16,000,000 shares of the Company's common stock. 4.1 Forward Purchase Contract Agreement (including Equity Units and Stripped Units Certificates), dated as of June 11, 2002, between the Company and The Bank of New York, as forward purchase contract agent. 4.2 Third Supplemental Indenture, dated as of June 11, 2002, between the Company and The Bank of New York, as trustee. 4.3 Pledge Agreement, dated as of June 11, 2002, between the Company, The Bank of New York, as forward purchase contract agent, and The Bank of New York, as collateral agent, custodial agent and securities intermediary. 4.4 Remarketing Agreement, dated as of June 11, 2002, between the Company, The Bank of New York, as forward purchase contract agent and Salomon Smith Barney Inc., as remarketing agent. 4.5 Form of Equity Units (included in Exhibit 4.1 hereto). 4.6 Form of Stripped Units (included in Exhibit 4.1 hereto). 4.7 Form of Senior Note due August 16, 2007 (included in Exhibit 4.2 hereto). 4.8 Form of Common Stock Certificate. 5.a.1 Opinion of Simpson Thacher & Bartlett regarding the legality of the Equity Units. 8.1 Tax Opinion of Simpson Thacher & Bartlett. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. AMERICAN ELECTRIC POWER COMPANY, INC. By: /s/ Thomas G. Berkemeyer ------------------------------------ Name: Thomas G. Berkemeyer Title: Assistant Secretary Date: June 11, 2002 INDEX TO EXHIBITS Exhibit Number Description 1.1 Underwriting Agreement, dated June 5, 2002, between the Company and Goldman, Sachs & Co., J.P. Morgan Securities Inc. and Salomon Smith Barney Inc., as representatives of the several underwriters named in Exhibit 1 thereto in connection with the offer and sale of 6,000,000 Equity Units. 1.2 Underwriting Agreement, dated June 5, 2002, between the Company and Goldman, Sachs & Co., J.P. Morgan Securities Inc. and Salomon Smith Barney Inc., as representatives of the several underwriters named in Exhibit 1 thereto in connection with the offer and sale of 16,000,000 shares of the Company's common stock. 4.1 Forward Purchase Contract Agreement (including Equity Units and Stripped Units Certificates), dated as of June 11, 2002, between the Company and The Bank of New York, as forward purchase contract agent. 4.2 Third Supplemental Indenture, dated as of June 11, 2002, between the Company and The Bank of New York, as trustee. 4.3 Pledge Agreement, dated as of June 11, 2002, between the Company, The Bank of New York, as forward purchase contract agent, and The Bank of New York, as collateral agent, custodial agent and securities intermediary. 4.4 Remarketing Agreement, dated as of June 11, 2002, between the Company, The Bank of New York, as forward purchase contract agent and Salomon Smith Barney Inc., as remarketing agent. 4.5 Form of Equity Units (included in Exhibit 4.1 hereto). 4.6 Form of Stripped Units (included in Exhibit 4.1 hereto). 4.7 Form of Senior Note due August 16, 2007 (included in Exhibit 4.2 hereto). 4.8 Form of Common Stock Certificate. 5.a.1 Opinion of Simpson Thacher & Bartlett regarding the legality of the Equity Units. 8.1 Tax Opinion of Simpson Thacher & Bartlett. EX-1.1 3 dex11.txt EXHIBIT 1.1 Exhibit 1.1 EXECUTION COPY AMERICAN ELECTRIC POWER COMPANY, INC. Underwriting Agreement 6,000,000 Equity Units* Dated June 5, 2002 AGREEMENT made between AMERICAN ELECTRIC POWER COMPANY, INC., a corporation organized and existing under the laws of the State of New York (the "Company"), and the several persons, firms and corporations (the "Underwriters") named in Exhibit 1 hereto. WITNESSETH: WHEREAS, the Company proposes to sell to the Underwriters 6,000,000 of its 9.25% Equity Units. The Equity Units will initially consist of 6,000,000 units (the "Underwritten Securities") with a stated amount, per Equity Unit, of $50 (the "Stated Amount"). Each Equity Unit will initially consist of (a) a forward stock purchase contract (a "Forward Purchase Contract") under which (i) the holder will agree to purchase from the Company on August 16, 2005 (the "Forward Purchase Contract Settlement Date"), for an amount of cash equal to the Stated Amount, shares of common stock, $6.50 par value, of the Company ("Common Stock"), equal to the Settlement Rate (as defined in the Forward Purchase Contract Agreement referred to below) and (ii) the Company will agree to pay to the holder contract adjustment payments set forth in the Forward Purchase Contract Agreement and (b) $50 principal amount of the Company's 5.75% senior notes due August 16, 2007 (the "Notes") issued pursuant to the Indenture (as defined below); and WHEREAS, the Company also proposes to grant to the Underwriters an option to purchase up to an additional 900,000 of its Equity Units to cover over-allotments (the "Option Securities"; the Option Securities, together with the Underwritten Securities, being hereinafter called the "Securities"). The Notes that will initially constitute a component of the Equity Units are hereinafter sometimes referred to as the "Underlying Notes". In accordance with the terms of the Forward Purchase Contract Agreement, to be dated as of June 11, 2002 (the "Forward Purchase Contract Agreement"), between the Company and The Bank of New York, as forward purchase contract agent (the "Forward Purchase Contract Agent"), the Underlying Notes will be pledged by the Forward Purchase Contract Agent, on behalf of the holders of the Equity Units, to The Bank of New York, as collateral agent (the "Collateral Agent"), pursuant to the Pledge Agreement, to be dated as of June 11, 2002 (the "Pledge Agreement"), among the Company, the Forward Purchase Contract Agent and the Collateral Agent, to secure the holders' obligations to - ------------------------- * Plus an option to purchase from American Electric Power Company, Inc. up to 900,000 additional Equity Units to cover over-allotments. purchase Common Stock under the Forward Purchase Contracts. The shares of Common Stock issuable pursuant to the Forward Purchase Contracts are hereinafter called the "Shares;" and WHEREAS, the Notes are to be issued pursuant to an indenture dated as of May 1, 2001 (the "Base Indenture"), between the Company and The Bank of New York, as trustee (the "Trustee"), as amended and supplemented by a supplemental indenture relating to the Notes constituting a part of the Securities (the "Supplemental Indenture") between the Company and the Trustee (the "Base Indenture", as supplemented and amended by the Supplemental Indenture, being referred to as the "Indenture"). The Securities and the Indenture are more fully described in the Prospectus referred to below; and WHEREAS, pursuant to a Remarketing Agreement (the "Remarketing Agreement") to be dated as of June 11, 2002, among the Company, the Forward Purchase Contract Agent and Salomon Smith Barney Inc., as remarketing agent (the "Remarketing Agent"), the Notes may be remarketed, subject to certain terms and conditions; and WHEREAS, as used in this Agreement, the term "Operative Documents" means the Forward Purchase Contract Agreement (including the Forward Purchase Contracts), the Pledge Agreement, the Remarketing Agreement, the Notes, the Indenture and the Equity Units; and WHEREAS, the Underwriters have designated the persons signing this Agreement (collectively, the "Representatives") to execute this Agreement on behalf of the respective Underwriters and to act for the respective Underwriters in the manner provided in this Agreement; and WHEREAS, the Company has prepared and filed, in accordance with the provisions of the Securities Act of 1933 (the "Act"), with the Securities and Exchange Commission (the "Commission"), a registration statement (File No. 333-86050) and a prospectus relating to $3,000,000,000 principal amount of its securities, including the Equity Units, and such registration statement has become effective; and WHEREAS, such registration statement, including the financial statements, the documents incorporated or deemed incorporated therein by reference, the exhibits thereto, being herein called the Registration Statement, and the prospectus, including the documents incorporated or deemed incorporated therein by reference, constituting a part of such Registration Statement, as it may be last amended or supplemented prior to the effectiveness of this Agreement, being herein called the Basic Prospectus, and the Basic Prospectus, as supplemented by a preliminary prospectus supplement (the "Preliminary Prospectus Supplement") and a final prospectus supplement (the "Prospectus Supplement") to include information relating to the Securities, including the names of the Underwriters, the price and terms of the offering, the interest rate, maturity date, the contract adjustment payments and certain other information relating to the Securities, which will be filed with the Commission pursuant to Rule 424(b) of the Commission's General Rules and Regulations under the Act (the "Rules"), including all documents then incorporated or deemed to have been incorporated therein by reference, being herein called the "Prospectus." NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, it is agreed between the parties as follows: 2 1. Purchase and Sale: (a) Upon the basis of the warranties and representations and on the terms and subject to the conditions herein set forth, the Company agrees to sell to the respective Underwriters named in Exhibit 1 hereto, severally and not jointly, and the respective Underwriters, severally and not jointly, agree to purchase from the Company, the respective number of Underwritten Securities set opposite their names in Exhibit 1 hereto, together aggregating all of the Underwritten Securities, at a purchase price equal to $48.50 per Security. (b) Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company hereby grants an option to the several Underwriters to purchase, severally and not jointly, not more than 900,000 Option Securities at the same purchase price per share as the Underwriters shall pay for the Underwritten Securities. Said option may be exercised only to cover over-allotments in the sale of the Underwritten Securities by the Underwriters. Said option may be exercised one time, in whole or in part, provided that the settlement of the Option Securities shall be no later than the 13th day after the date of issuance of the Underwritten Securities. Said option shall be exercised upon written or telegraphic notice by the Representatives to the Company setting forth the number of shares of the Option Securities as to which the several Underwriters are exercising the option and the settlement date. The number of shares of the Option Securities to be purchased by each Underwriter shall be the same percentage of the total number of shares of the Option Securities to be purchased by the several Underwriters as such Underwriter is purchasing of the Underwritten Securities, subject to such adjustments as you in your absolute discretion shall make to eliminate any fractional shares. 2. Payment and Delivery: Delivery of and payment for the Underwritten Securities and the Option Securities (if the option provided for in Section 1(b) hereof shall have been exercised on or before the third Business Day prior to the Closing Date) shall be made at the offices of Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, New York 10017, or at such other place as shall be agreed upon by the Representatives and the Company, at 10:00 a.m., New York City time, on June 11, 2002, or at such time on such later date not more than three Business Days after the foregoing date as the Representatives shall designate, which date and time may be postponed by agreement between the Representatives and the Company or as provided in Section 8 hereof (such date and time of delivery and payment for the Securities being herein called the "Closing Date"). Delivery of the Securities shall be made to the Representatives for the respective accounts of the several Underwriters against payment by the several Underwriters through the Representatives of the purchase price thereof to or upon the order of the Company by wire transfer payable in same-day funds to an account specified by the Company. Delivery of the Underwritten Securities and the Option Securities shall be made through the facilities of The Depository Trust Company unless the Representatives shall otherwise instruct. If the option provided for in Section 1(b) hereof is exercised after the third Business Day prior to the Closing Date, the Company will deliver the Option Securities (at the expense of the Company) to the Representatives, at 388 Greenwich Street, New York, New York, on the date specified by the Representatives (which shall be within three Business Days 3 after exercise of said option) for the respective accounts of the several Underwriters, against payment by the several Underwriters through the Representatives of the purchase price thereof to or upon the order of the Company by wire transfer payable in same-day funds to an account specified by the Company. If settlement for the Option Securities occurs after the Closing Date, the Company will deliver to the Representatives on the settlement date for the Option Securities, and the obligation of the Underwriters to purchase the Option Securities shall be conditioned upon receipt of, supplemental opinions, certificates and letters confirming as of such date the opinions, certificates and letters delivered on the Closing Date pursuant to Section 3 hereof. Any settlement date for the Option Securities after the Closing Date shall be such date as the Company and the Representatives may agree, but in no event shall such date be sooner than the third Business Day following the exercise of the option provided for in Section 1(b) hereof. Certificates for the Securities shall be registered in such names as the Underwriters may request in writing at least two full Business Days before the Closing Date. The certificates for Securities will be made available in New York City for examination by the Underwriters no later than 10:00 a.m., New York City time on the Business Day prior to the Closing Date. 3. Conditions of Underwriters' Obligations: The several obligations of the Underwriters hereunder to purchase Underwritten Securities and the Option Securities, as the case may be, are subject to the accuracy of the warranties and representations on the part of the Company on the date hereof and at the Closing Date, and if applicable, the settlement date pursuant to Section 2 hereof, and to the following other conditions: (a) That all legal proceedings to be taken and all legal opinions to be rendered in connection with the sale of the Securities shall be satisfactory in form and substance to Dewey Ballantine LLP, counsel to the Underwriters and the Company shall have furnished such counsel all documents and information that it may reasonably request to enable it to pass upon such matters. (b) That, at the Closing Date, the Representatives shall be furnished with the following opinions, dated the day of the Closing Date, with conformed copies or signed counterparts thereof for the other Underwriters, with such changes therein as may be agreed upon by the Company and the Representatives with the approval of Dewey Ballantine LLP, counsel to the Underwriters: (i) Opinion of Simpson Thacher & Bartlett, substantially in the form attached hereto as Exhibit A-1, and either of Thomas G. Berkemeyer, Esq. or William E. Johnson, Esq., counsel to the Company, substantially in the form attached hereto as Exhibit A-2; (ii) Opinion of Dewey Ballantine LLP, counsel to the Underwriters, substantially in the form attached hereto as Exhibit B; (iii) Opinion of Pillsbury Winthrop LLP, counsel to the Trustee, the Forward Purchase Contract Agent and the Collateral Agent, Securities Intermediary and Custodial Agent, substantially in the 4 form attached hereto as Exhibit C; (c) That the Representatives shall have received letters from: (i) Arthur Andersen LLP in form and substance satisfactory to the Representatives, dated as of May 24, 2002, (i) confirming that they are independent certified public accountants within the meaning of the Act and the applicable published rules and regulations of the Commission thereunder and (ii) stating that in their opinion the financial statements audited by them and incorporated by reference in the Registration Statement complied as to form in all material respects with the then applicable accounting requirements of the Commission, including the applicable published rules and regulations of the Commission; and (ii) KPMG Audit plc in form and substance satisfactory to the Representatives, dated as of the Closing Date, (i) confirming that they are independent certified public accountants within the meaning of the Act and the applicable published rules and regulations of the Commission thereunder and (ii) stating that in their opinion the financial statements audited by them and incorporated by reference in the Registration Statement complied as to form in all material respects with the then applicable accounting requirements of the Commission, including the applicable published rules and regulations of the Commission; and (iii) Deloitte & Touche LLP in form and substance satisfactory to the Representatives, (A) dated as of the date of this Agreement and substantially in the form of Exhibit D hereto and (B) dated as of the Closing Date, reaffirming the statements made in the letter furnished pursuant to clause (A) above, except that the specified date referred to shall be a date not more than five business days prior to the Closing Date. (d) That no amendment to the Registration Statement and that no prospectus or prospectus supplement of the Company (other than the prospectus or amendments, prospectuses or prospectus supplements relating solely to securities other than the Securities) relating to the Securities and no document which would be deemed incorporated in the Prospectus by reference filed subsequent to the date hereof and prior to the Closing Date shall contain material information substantially different from that contained in the Registration Statement which is unsatisfactory in substance to the Representatives or unsatisfactory in form to Dewey Ballantine LLP, counsel to the Underwriters. (e) That, at the Closing Date, an appropriate order of the Commission under the Public Utility Holding Company Act of 1935, as amended (the "1935 Act") necessary to permit the sale of the Securities to the Underwriters, shall be in effect; and that, prior to the Closing Date, no stop order with respect to the effectiveness of the Registration Statement 5 shall have been issued under the Act by the Commission or proceedings therefor initiated. (f) That, at the Closing Date, there shall not have been any material adverse change in the business, properties or financial condition of the Company from that set forth in the Prospectus (other than changes referred to in or contemplated by the Prospectus), and that the Company shall, at the Closing Date, have delivered to the Representatives a certificate of an executive officer of the Company to the effect that, to the best of his knowledge, information and belief, there has been no such change. (g) That the Company shall have performed such of its obligations under this Agreement as are to be performed at or before the Closing Date by the terms hereof. (h) Subsequent to the date of this Agreement, there shall not have been decreases in the ratings of the Company's senior unsecured debt securities by both Moody's Investors Services, Inc. ("Moody's") and Standard & Poor's Ratings Group ("S&P") as follows: (i) a decrease by Moody's to a rating of Baa3 or below and (ii) a decrease by S&P to a rating of BBB- or below. (i) That, at the Closing Date, the Securities shall have been approved for listing on the New York Stock Exchange, subject to official notice of issuance, and satisfactory evidence of such actions shall have been provided to the Representatives. (j) That, at the Closing Date, each of the executive officers and directors of the Company listed in Exhibit E shall have entered into an agreement substantially in the form attached hereto as Exhibit F. In case any of the conditions specified in this Section 3 shall not have been fulfilled, this Agreement may be terminated by the Underwriters at any time at or prior to the Closing Date upon written notice thereof to the Company. Any such termination shall be without liability of any party to any other party except as otherwise provided in Section 4(f), Section 4(g) and Section 4(h) hereof and except for any liability under Section 7 hereof. 4. Certain Covenants of the Company: In further consideration of the agreements of the Underwriters herein contained, the Company covenants as follows: (a) As soon as practicable, and in any event within the time prescribed by Rule 424 under the Act, to file the Prospectus with the Commission; as soon as the Company is advised thereof, to advise the Representatives and confirm the advice in writing of any request made by the Commission for amendments to the Registration Statement or Prospectus or for additional information with respect thereto or of the entry of a stop order suspending the effectiveness of the Registration Statement or of the initiation or threat of any proceedings for that purpose and, if such a stop order should be entered by the Commission, to make every reasonable effort to obtain the prompt lifting or removal thereof. (b) To deliver to the Underwriters, without charge, as soon as practicable (and in any event within 24 hours after the date hereof), and from time to time thereafter during such period of time (not exceeding nine months) after the date hereof as they are required by 6 law to deliver a prospectus, as many copies of the Prospectus (as supplemented or amended if the Company shall have made any supplements or amendments thereto, other than supplements or amendments relating solely to securities other than the Securities) as the Representatives may reasonably request; and in case any Underwriter is required to deliver a prospectus after the expiration of nine months after the date hereof, to furnish to any Underwriter, upon request, at the expense of such Underwriter, a reasonable quantity of a supplemental prospectus or of supplements to the Prospectus complying with Section 10(a)(3) of the Act. (c) To furnish to the Representatives, upon request, a copy, certified by the Secretary or an Assistant Secretary of the Company, of the Registration Statement as initially filed with the Commission and of all amendments thereto (exclusive of exhibits), other than amendments relating solely to securities other than the Securities and, upon request, to furnish to the Representatives sufficient plain copies thereof (exclusive of exhibits) for distribution of one to the other Underwriters. (d) For such period of time after the date hereof as they are required by law to deliver a prospectus, if any event shall have occurred as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not contain any untrue statement of a material fact or not omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading, immediately to notify the Underwriters of such event and forthwith to prepare and furnish, at its own expense during the period ending nine months from the date of this Agreement, and thereafter at the Underwriters' expense, to the Underwriters and to dealers (whose names and addresses are furnished to the Company by the Representatives) to whom principal amounts of the Securities may have been sold by the Representatives for the accounts of the Underwriters and, upon request, to any other dealers making such request, copies of such amendments to the Prospectus or supplements to the Prospectus. (e) As soon as practicable, the Company will make generally available to its security holders and to the Underwriters an earnings statement or statement of the Company and its subsidiaries which will satisfy the provisions of Section 11(a) of the Act and Rule 158 under the Act. (f) To use its best efforts to qualify the Securities for offer and sale under the securities or "blue sky" laws of such jurisdictions as the Representatives may designate within six months after the date hereof and itself to pay, or to reimburse the Underwriters and their counsel for, reasonable filing fees and expenses in connection therewith in an amount not exceeding $3,500 in the aggregate (including filing fees and expenses paid and incurred prior to the effective date hereof), provided, however, that the Company shall not be required to qualify as a foreign corporation or to file a consent to service of process or to file annual reports or to comply with any other requirements deemed by the Company to be unduly burdensome. (g) To pay all expenses, fees and taxes (other than transfer taxes on resales of the Securities by the respective Underwriters, but including all amounts relating to (i) the 7 Company's costs and expenses for travel, lodging and incidental expenses relating to investor presentations on any "road show" undertaken in connection with the marketing of the Securities; (ii) the listing of the Securities on the New York Stock Exchange; (iii) the preparation of the Registration Statement, the Preliminary Prospectus Supplement and the Prospectus Supplement (and any amendments or supplements thereto); (iv) the sale and delivery of the Securities; (v) the reasonable fees and disbursements of counsel and accountants for the Company, the Trustee and any paying agent, the Forward Purchase Contract Agent and the Collateral Agent, Securities Intermediary and Custodial Agent and the Remarketing Agent; and (vi) the printing and delivery of the Preliminary Prospectus Supplement and the Prospectus Supplement) in connection with the sale and delivery of the Securities, except that the Company shall be required to pay the fees and disbursements (other than disbursements referred to in paragraph (f) of this Section 4) of Dewey Ballantine LLP, counsel to the Underwriters, only in the events provided in paragraph (h) of this Section 4, the Underwriters hereby agreeing to pay such fees and disbursements in any other event. (h) If the Underwriters shall not take up and pay for the Securities due to the failure of the Company to comply with any of the conditions specified in Section 3 hereof, or, if this Agreement shall be terminated in accordance with the provisions of Section 9(b) or 13(ii) hereof, to pay the fees and disbursements of Dewey Ballantine LLP, counsel to the Underwriters, and, to reimburse the Underwriters for their reasonable out-of-pocket expenses, in an aggregate amount not exceeding a total of $50,000, incurred in connection with the financing contemplated by this Agreement. (i) To use its best efforts to cause the Securities to be accepted for clearance and settlement through the facilities of The Depositary Trust Company. (j) The Company will timely file any certificate required by the 1935 Act in connection with the sale of the Securities. (k) The Company will not, without the prior written consent of the Representatives, offer, sell, contract to sell, pledge, or otherwise dispose of, (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the Company or any affiliate of the Company or any person in privity with the Company or any affiliate of the Company) directly or indirectly, including the filing (or participation in the filing) of a registration statement with the Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Rule 16a-1 under the 1934 Act, any shares of Common Stock or any securities convertible into, or exercisable, or exchangeable for, shares of Common Stock other than as provided in this Agreement; or publicly announce an intention to effect any such transaction, for a period of 90 days after the date of the Underwriting Agreement, provided, however, that (i) the Company may issue and sell up to 18,400,000 shares of its Common Stock in the concurrent offering contemplated by the Prospectus and (ii) the Company may issue and sell Common Stock pursuant to the terms of any employee stock option plan, stock ownership plan, dividend reinvestment plan or any other similar plan of the Company in effect as of the date hereof and the Company may 8 issue Common Stock issuable upon the conversion of securities or the exercise of warrants outstanding as of the date hereof. (l) To use its reasonable efforts to effect the listing of the Securities on the New York Stock Exchange. 5. Representations and Warranties of by the Company: The Company represents and warrants to, and agrees with each Underwriter, as set forth below: (a) The Registration Statement on its effective date complied, or was deemed to comply, with the applicable provisions of the Act and the rules and regulations of the Commission and the Registration Statement at its effective date did not, and at the Closing Date will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Basic Prospectus on the date of this Agreement and the Prospectus when first filed in accordance with Rule 424(b) complies, and at the Closing Date the Prospectus will comply, with the applicable provisions of the Act and the Trust Indenture Act of 1939, as amended, and the rules and regulations of the Commission, the Basic Prospectus on the date of this Agreement and the Prospectus when first filed in accordance with Rule 424(b) under the Act do not, and the Prospectus at the Closing Date will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the Company makes no warranty or representation to the Underwriters with respect to any statements or omissions made in the Registration Statement, the Basic Prospectus or the Prospectus in reliance upon and in conformity with information furnished in writing to the Company by, or through the Representatives on behalf of, any Underwriter expressly for use in the Registration Statement, the Basic Prospectus or Prospectus, or to any statements in or omissions from that part of the Registration Statement that shall constitute the Statement of Eligibility under the Trust Indenture Act of 1939 of any indenture trustee under an indenture of the Company. (b) The documents incorporated by reference in the Registration Statement or Prospectus, when they were filed with the Commission, complied in all material respects with the applicable provisions of the 1934 Act and the rules and regulations of the Commission thereunder, and as of such time of filing, when read together with the Prospectus, none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (c) Since the respective dates as of which information is given in the Registration Statement and the Prospectus, except as otherwise referred to or contemplated therein, there has been no material adverse change in the business, properties or financial condition of the Company. (d) This Agreement has been duly authorized, executed and delivered by the Company. 9 (e) As of the Closing Date, the Indenture will have been duly authorized by the Company and duly qualified under the Trust Indenture Act of 1939, as amended, and, when executed and delivered by the Trustee and the Company, will constitute a legal, valid and binding instrument enforceable against the Company in accordance with its terms and the Notes will have been duly authorized, executed, authenticated and, when paid for by the purchasers thereof, will constitute legal, valid and binding obligations of the Company entitled to the benefits of the Indenture, except as the enforceability thereof may be limited by bankruptcy, insolvency, or other similar laws affecting the enforcement of creditors' rights in general, and except as the availability of the remedy of specific performance is subject to general principles of equity (regardless of whether such remedy is sought in a proceeding in equity or at law), and by an implied covenant of good faith and fair dealing. (f) Each of the Forward Purchase Contract Agreement, the Pledge Agreement and the Remarketing Agreement has been duly authorized by the Company. (g) The Equity Units have been duly authorized by the Company. The Equity Units and the Shares have been duly registered under the Exchange Act; and the issuance of the Equity Units is not subject to preemptive or other similar rights. (h) The execution, delivery and performance of this Agreement, the Indenture and the other Operative Documents and the Securities and the consummation by the Company of the transactions contemplated herein and therein is not in violation of its charter or bylaws, will not result in the violation of any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, governmental instrumentality or court having jurisdiction over the Company or its properties and will not conflict with, or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company under any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument to which the Company is a party or by which it may be bound or to which any of its properties may be subject (except for conflicts, breaches or defaults which would not, individually or in the aggregate, be materially adverse to the Company or materially adverse to the transactions contemplated by this Agreement or the other Operative Documents). (i) The Shares of Common Stock to be issued and sold by the Company upon settlement of the Forward Purchase Contracts have been duly authorized and reserved for issuance and, when issued and delivered in accordance with the provisions of the Forward Purchase Contracts, will be duly and validly issued, fully paid and non-assessable and will not be subject to any preemptive or similar rights. (j) No authorization, approval, consent or order of any court or governmental authority or agency is necessary in connection with the issuance and sale by the Company of the Securities or the transactions by the Company contemplated in this Agreement or in the other Operative Documents, except (A) such as may be required under the 1933 Act or the rules and regulations thereunder; (B) such as may be required under the 1935 Act; (C) the qualification of the Indenture under the 1939 Act; and (D) such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or 10 Blue Sky laws. (k) The Company and each "significant subsidiary" of the Company (as such term is defined in Rule 1-02 of Regulation S-X promulgated under the Act) has been duly organized and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation. (l) The consolidated financial statements of the Company and its consolidated subsidiaries together with the notes thereto, included or incorporated by reference in the Prospectus present fairly the financial position of the Company at the dates or for the periods indicated; said consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles applied, apart from reclassifications disclosed therein, on a consistent basis throughout the periods involved; and the selected consolidated financial information of the Company included in the Prospectus present fairly the information shown therein and have been compiled, apart from reclassifications disclosed therein, on a basis consistent with that of the audited financial statements of the Company included or incorporated by reference in the Prospectus. (m) There is no pending action, suit, investigation, litigation or proceeding, including, without limitation, any environmental action, affecting the Company or any of its "significant subsidiaries" before any court, governmental agency or arbitration that is reasonably likely to have a material adverse effect on the business, properties, financial condition or results of operations of the Company, except as disclosed in the Prospectus. The Company's covenants, warranties and representations contained in this Agreement, shall remain in full force and effect regardless of any investigation made by or on behalf of any person, and shall survive the delivery of and payment for the Securities hereunder. 6. Warranties of Underwriters: (a) Each Underwriter warrants and represents that the information furnished in writing to the Company through the Representatives for use in the Registration Statement, in the Basic Prospectus, in the Prospectus, or in the Prospectus as amended or supplemented is correct as to such Underwriter. (b) Each of the Underwriters represents and agrees that it has not and will not offer, sell or delivery any of the Securities directly or indirectly, or distribute the Prospectus or any other offering material relating to the Securities, in or from any jurisdiction except under circumstances that will result in compliance with the applicable laws and regulations thereof and in a manner that will not impose any obligations on the Company except as set forth in this Agreement. The warranties and representations of such Underwriter contained in this Agreement, shall remain in full force and effect regardless of any investigation made by or on behalf of the Company or other person, and shall survive the delivery of and payment for the Securities hereunder. 11 7. Indemnification and Contribution: (a) To the extent permitted by law, the Company agrees to indemnify and hold you harmless and each person, if any, who controls you within the meaning of Section 15 of the Act, against any and all losses, claims, damages or liabilities, joint or several, to which you, they or any of you or them may become subject under the Act or otherwise, and to reimburse you and such controlling person or persons, if any, for any legal or other expenses incurred by you or them in connection with defending any action, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any alleged untrue statement or untrue statement of a material fact contained in the Registration Statement, in the Basic Prospectus (if used prior to the effective date of this Agreement), or in the Prospectus, or if the Company shall furnish or cause to be furnished to you any amendments or any supplements to the Prospectus, in the Prospectus as so amended or supplemented except to the extent that such amendments or supplements relate solely to securities other than the Securities (provided that if such Prospectus or such Prospectus, as amended or supplemented, is used after the period of time referred to in Section 4(b) hereof, it shall contain such amendments or supplements as the Company deems necessary to comply with Section 10(a) of the Act), or arise out of or are based upon any alleged omission or omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any such alleged untrue statement or omission, or untrue statement or omission which was made in the Registration Statement, in the Basic Prospectus or in the Prospectus, or in the Prospectus as so amended or supplemented, in reliance upon and in conformity with information furnished in writing to the Company by or through the Representatives expressly for use therein or with any statements in or omissions from that part of the Registration Statement that shall constitute the Statement of Eligibility under the Trust Indenture Act of any indenture trustee under an indenture of the Company, and except that this indemnity shall not inure to your benefit (or of any person controlling you) on account of any losses, claims, damages, liabilities or actions arising from the sale of the Securities to any person if such loss arises from the fact that a copy of the Prospectus, as the same may then be supplemented or amended to the extent such Prospectus was provided to you by the Company (excluding, however, any document then incorporated or deemed incorporated therein by reference), was not sent or given by you to such person with or prior to the written confirmation of the sale involved and the alleged omission or alleged untrue statement or omission or untrue statement was corrected in the Prospectus as supplemented or amended at the time of such confirmation, and such Prospectus, as amended or supplemented, was timely delivered to you by the Company prior to the written confirmation of the sale involved. You agree promptly after the receipt by you of written notice of the commencement of any action in respect to which indemnity from the Company on account of its agreement contained in this Section 7(a) may be sought by you, or by any person controlling you, to notify the Company in writing of the commencement thereof, but your omission so to notify the Company of any such action shall not release the Company from any liability which it may have to you or to such controlling person otherwise than on account of the indemnity agreement contained in this Section 7(a). In case any such action shall be brought against you or any such person controlling you and you shall notify the Company of the commencement thereof, as above provided, the Company shall be entitled to participate in, and, to the extent that it shall wish, including the selection of counsel (such 12 counsel to be reasonably acceptable to the indemnified party), to direct the defense thereof at its own expense. In case the Company elects to direct such defense and select such counsel (hereinafter, Company's counsel), you or any controlling person shall have the right to employ your own counsel, but, in any such case, the fees and expenses of such counsel shall be at your expense unless (i) the Company has agreed in writing to pay such fees and expenses or (ii) the named parties to any such action (including any impleaded parties) include both you or any controlling person and the Company and you or any controlling person shall have been advised by your counsel that a conflict of interest between the Company and you or any controlling person may arise (and the Company's counsel shall have concurred in good faith with such advice) and for this reason it is not desirable for the Company's counsel to represent both the indemnifying party and the indemnified party (it being understood, however, that the Company shall not, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys for you or any controlling person (plus any local counsel retained by you or any controlling person in their reasonable judgment), which firm (or firms) shall be designated in writing by you or any controlling person). (b) Each Underwriter agrees, to the extent permitted by law, to indemnify, hold harmless and reimburse the Company, its directors and such of its officers as shall have signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the Act, to the same extent and upon the same terms as the indemnity agreement of the Company set forth in Section 7(a) hereof, but only with respect to untrue statements or alleged untrue statements or omissions or alleged omissions made in the Registration Statement, or in the Basic Prospectus, or in the Prospectus, or in the Prospectus as so amended or supplemented, in reliance upon and in conformity with information furnished in writing to the Company by the Representatives on behalf of such Underwriter expressly for use therein. The Company agrees promptly after the receipt by it of written notice of the commencement of any action in respect to which indemnity from you on account of your agreement contained in this Section 7(b) may be sought by the Company, or by any person controlling the Company, to notify you in writing of the commencement thereof, but the Company's omission so to notify you of any such action shall not release you from any liability which you may have to the Company or to such controlling person otherwise than on account of the indemnity agreement contained in this Section 7(b). (c) If recovery is not available or insufficient under Section 7(a) or 7(b) hereof for any reason other than as specified therein, the indemnified party shall be entitled to contribution for any and all losses, claims, damages, liabilities and expenses for which such indemnification is so unavailable or insufficient under this Section 7(c). In determining the amount of contribution to which such indemnified party is entitled, there shall be considered the portion of the proceeds of the offering of the Securities realized, the relative knowledge and access to information concerning the matter with respect to which the claim was asserted, the opportunity to correct and prevent any statement or omission, and any equitable considerations appropriate under the circumstances. The Company and the Underwriters agree that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation (even if the Underwriters were treated as one entity for such 13 purpose) without reference to the considerations called for in the previous sentence. No Underwriter or any person controlling such Underwriter shall be obligated to contribute any amount or amounts hereunder which in the aggregate exceeds the total price of the Securities purchased by such Underwriter under this Agreement, less the aggregate amount of any damages which such Underwriter and its controlling persons have otherwise been required to pay in respect of the same claim or any substantially similar claim. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. An Underwriter's obligation to contribute under this Section 7 is in proportion to its purchase obligation and not joint with any other Underwriter. (d) No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which contribution could be sought under this Section 7 (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of such indemnified party. (e) In no event shall any indemnifying party have any liability or responsibility in respect of the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim effected without its prior written consent. The agreements contained in Section 7 hereof shall remain in full force and effect regardless of any investigation made by or on behalf of any person, and shall survive the delivery of and payment for the Securities hereunder. 8. Default of Underwriters: If any Underwriter under this Agreement shall fail or refuse (otherwise than for some reason sufficient to justify, in accordance with the terms hereof, the cancellation or termination of its obligations hereunder) to purchase and pay for the number of Securities which it has agreed to purchase and pay for hereunder, and the number of Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the number of the Securities, the other Underwriters shall be obligated severally in the proportions which the amounts of Securities set forth opposite their names in Exhibit 1 hereto bear to the number of Securities set forth opposite the names of all such non-defaulting Underwriters, to purchase the Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on the terms set forth herein; provided that in no event shall the number of Securities which any Underwriter has agreed to purchase pursuant to Section 1 hereof be increased pursuant to this Section 8 by an amount in excess of one-ninth of such number of Securities without the written consent of such Underwriter. In the event of any such purchase, (a) the non-defaulting Underwriters or the Company shall have the right to fix as a postponed Closing Date a date not exceeding four full business days after the date specified in Section 2 and (b) the 14 respective number of Securities to be purchased by the non-defaulting Underwriters shall be taken as the basis of their respective underwriting obligations for all purposes of this Agreement. If any Underwriter or Underwriters shall fail or refuse to purchase Securities and the number of Securities with respect to which such default occurs is more than one-tenth of the number of the Securities then this Agreement shall terminate without liability on the part of any non-defaulting Underwriter; provided, however, that the non-defaulting Underwriters may agree, in their sole discretion, to purchase the Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on the terms set forth herein. In the event of any such termination, the Company shall not be under any liability to any Underwriter (except to the extent, if any, provided in Section 4(h) hereof), nor shall any Underwriter (other than an Underwriter who shall have failed or refused to purchase the Securities without some reason sufficient to justify, in accordance with the terms hereof, its termination of its obligations hereunder) be under any liability to the Company or any other Underwriter. Nothing herein contained shall release any defaulting Underwriter from its liability to the Company or any non-defaulting Underwriter for damages occasioned by its default hereunder. 9. Termination of Agreement by the Underwriters: This Agreement may be terminated at any time prior to the Closing Date by the Representatives if, after the execution and delivery of this Agreement and prior to the Closing Date, in the Representatives' reasonable judgment, the Underwriters' ability to market the Securities shall have been materially adversely affected because: (a) trading in securities on the New York Stock Exchange shall have been generally suspended by the Commission or by the New York Stock Exchange, or (b) trading in the securities of the Company shall have been suspended by the New York Stock Exchange, or (c) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of a national emergency or war or other national or international calamity or crisis, or (d) a general banking moratorium shall have been declared by Federal or New York State authorities. If the Representatives elect to terminate this Agreement, as provided in this Section 9, the Representatives will promptly notify the Company by telephone or by telex or facsimile transmission, confirmed in writing. If this Agreement shall not be carried out by any Underwriter for any reason permitted hereunder, or if the sale of the Securities to the Underwriters as herein contemplated shall not be carried out because the Company is not able to comply with the terms hereof, the Company shall not be under any obligation under this Agreement and shall not be liable to any Underwriter or to any member of any selling group for the loss of anticipated profits from the transactions contemplated by this Agreement (except that the Company shall remain liable to the 15 extent provided in Sections 4(g), 4(h) and 7 hereof) and the Underwriters shall be under no liability to the Company nor be under any liability under this Agreement to one another. 10. Notices: All notices hereunder shall, unless otherwise expressly provided, be in writing and be delivered at or mailed to the following addresses or by telex or facsimile transmission confirmed in writing to the following addresses: if to the Underwriters, to the Representatives at the following firms: Goldman, Sachs & Co. 85 Broad Street New York, New York 10004 Attention: Registration Department J.P. Morgan Securities Inc. 277 Park Avenue New York, New York 10172 Attention: Syndicate Desk Salomon Smith Barney Inc. 388 Greenwich Avenue New York, New York 10013 Attention: Syndicate Department and, if to the Company, to American Electric Power Company, Inc., c/o American Electric Power Service Corporation, 1 Riverside Plaza, Columbus, Ohio 43215, Attention: A. A. Pena, Treasurer, (fax 614/223-1687). 11. Parties in Interest: The agreement herein set forth has been and is made solely for the benefit of the Underwriters, the Company (including the directors thereof and such of the officers thereof as shall have signed the Registration Statement), the controlling persons, if any, referred to in Section 7 hereof, and their respective successors, assigns, executors and administrators, and, except as expressly otherwise provided in Section 8 hereof, no other person shall acquire or have any right under or by the virtue of this Agreement. 12. Definition of Certain Terms: If there be two or more persons, firms or corporations named in Exhibit 1 hereto, the term "Underwriters", as used herein, shall be deemed to mean the several persons, firms or corporations, so named (including the Representatives herein mentioned, if so named) and any party or parties substituted pursuant to Section 8 hereof, and the term "Representative", as used herein, shall be deemed to mean the representative or representatives designated by, or in the manner authorized by, the Underwriters. All obligations of the Underwriters hereunder are several and not joint. If there shall be only one person, firm or corporation named in Exhibit 1 hereto, the term "Underwriters" and the term "Representative", as used herein, shall mean such person, firm or corporation. The term "successors" as used in this Agreement shall not include any purchaser, as such purchaser, of any of the Securities from any of the respective Underwriters. 16 13. Conditions of the Company's Obligations: The obligations of the Company hereunder are subject to (i) the Underwriters' performance of their obligations hereunder; and (ii) that at the Closing Date the Commission shall have issued an appropriate order under the Act and 1935 Act, and such orders shall remain in full force and effect, authorizing the transactions contemplated hereby. In case these conditions shall not have been fulfilled, this Agreement may be terminated by the Company upon notice thereof to the Underwriters. Any such termination shall be without liability of any party to any other party except as otherwise provided in Sections 4(g), 4(h) and 7 hereof. 14. Offering by Underwriters: It is understood that the several Underwriters propose to offer the Securities for sale to the public as set forth in the Prospectus. 15. Applicable Law: This Agreement will be governed and construed in accordance with the laws of the State of New York. 16. Execution of Counterparts: This Agreement may be executed in several counterparts, each of which shall be regarded as an original and all of which shall constitute one and the same document. 17 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, on the date first above written. AMERICAN ELECTRIC POWER COMPANY, INC. By: /s/ Geoffrey S. Chatas ----------------------------------------- Name: Geoffrey S. Chatas Title: Assistant Treasurer 18 GOLDMAN, SACHS & CO. By: /s/ Goldman, Sachs & Co. ---------------------------------- Name: Alan Levande J.P. MORGAN SECURITIES INC. By: /s/ Michael Tiedemann ---------------------------------- Name: Michael Tiedemann SALOMON SMITH BARNEY INC. By: /s/ Henry A. Clark ---------------------------------- Name: Henry A. Clark as Representatives and on behalf of the Underwriters named in Exhibit 1 hereto 19 EXHIBIT 1
Name of Underwriter Number of Underwritten Securities - ------------------- --------------------------------- to be Purchased --------------- Goldman, Sachs & Co. 1,350,000 J.P. Morgan Securities Inc. 1,350,000 Salomon Smith Barney Inc. 1,350,000 Banc of America Securities LLC 240,000 Credit Suisse First Boston Corporation 240,000 Lehman Brothers Inc. 240,000 Merrill Lynch, Pierce, Fenner & Smith Incorporated 240,000 UBS Warburg LLC 240,000 A.G. Edwards & Sons, Inc. 125,000 Danske Securities (US), Inc. 125,000 Edward D. Jones & Co., L.P. 125,000 McDonald Investments Inc. 125,000 TD Securities (USA) Inc. 125,000 The Williams Capital Group, L.P. 125,000 TOTAL ..................................................... 6,000,000 =========
EXHIBIT A-1 OPINION OF SIMPSON THACHER & BARTLETT (a) The Company has been duly incorporated and is validly existing and in good standing as a corporation under the laws of the State of New York and has full corporate power and authority to conduct its business as described in the Registration Statement and Prospectus. (b) An appropriate order of the Commission legally required for the issuance and sale of the Securities by the Company under the Public Utility Holding Company Act of 1935 has been obtained; such order is sufficient for the issuance and sale of the Securities by the Company; and no other order, consent or other authorization or approval of any United States federal or New York State governmental body (other than in connection or in compliance with the previsions of the securities or "blue sky" laws of any jurisdiction, as to which we express no opinion) not already obtained is legally required for the issuance and sale of the Securities by the Company in accordance with the terms of the Underwriting Agreement, the performance by the Company of its obligations with respect to the Securities and under the Underwriting Agreement and the Indenture. (c) The Underwriting Agreement has been duly authorized, executed and delivered by the Company. (d) The Indenture has been duly authorized, executed and delivered by the Company and duly qualified under the Trust Indenture Act and, assuming that the Indenture is the valid and legally binding obligation of the Trustee, constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms. (e) The Forward Purchase Contract Agreement has been duly authorized by the Company and, when validly executed and delivered by the Company, and assuming that the Forward Purchase Contract Agreement is the valid and legally binding obligation of the Forward Purchase Contract Agent, the Forward Purchase Contract Agreement constitutes a valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms. (f) The Pledge Agreement has been duly authorized by the Company and, when validly executed and delivered by the Company, and assuming that the Pledge Agreement is the valid and legally binding obligation of each of the Collateral Agent and the Forward Purchase Contract Agent, the Pledge Agreement constitutes a valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms. (g) The Remarketing Agreement has been duly authorized by the Company and, when validly executed and delivered by the Company, and assuming that the Remarketing Agreement is the valid and legally binding obligation of the Remarketing Agent, constitutes a valid and binding obligation of the Company enforceable against the Company in A-1-1 accordance with its terms. (h) The Notes have been duly authorized and executed and issued by the Company and, assuming due authentication thereof by the Trustee and upon payment and delivery in accordance with the Underwriting Agreement, will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms and entitled to the benefits of the Indenture. (i) The shares of Common Stock to be issued and sold by the Company pursuant to the Forward Purchase Contract Agreement have been duly authorized and reserved for issuance upon settlement of the Forward Purchase Contracts and, when issued and delivered in accordance with the provisions of the Forward Purchase Contract Agreement, will be validly issued, fully paid and non-assessable. There are no preemptive rights under federal or New York law to subscribe for or to purchase such shares of Common Stock; there are no preemptive or other rights to subscribe for or to purchase such shares of Common Stock pursuant to the Restated Certificate of Incorporation or By-Laws of the Company. (j) The Equity Units have been duly authorized, and, upon payment and delivery in accordance with the Underwriting Agreement, the Equity Units will be validly issued, and, assuming that the Forward Purchase Contracts and the Forward Purchase Contract Agreement are the valid and legally binding obligations of the Forward Purchase Contract Agent and the Forward Purchase Contracts have been duly authenticated by the Forward Purchase Contract Agent, the Forward Purchase Contracts will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms and entitled to the benefits of the Forward Purchase Contract Agreement; there are no preemptive rights under federal or New York law or under the Delaware General Corporation Law to subscribe for or to purchase Equity Units; there are no preemptive or other rights to subscribe for or to purchase Equity Units pursuant to the Restated Certificate of Incorporation or By-Laws of the Company. (k) The issue and sale of the Securities by the Company and the compliance by the Company with all of the provisions of the Underwriting Agreement and the other Operative Documents will not violate any Federal or New York statute or any order known to us issued pursuant to any Federal or New York statute by any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties (except that various consents of, and filings with governmental authorities of, the State of New York may be required to be obtained or made, as the case may be, in connection or compliance with the provisions of the securities or "blue sky" laws of the State of New York). (l) The statements made in the Prospectus under the captions "Description of the Equity Units," "Description of the Senior Notes" and "Description of the Stock Purchase Contracts and the Stock Purchase Units," insofar as they purport to constitute summaries of certain terms of documents referred to therein, constitute accurate summaries of the terms of such documents in all material respects. A-1-2 (m) Subject to the qualifications, exceptions, assumptions and limitations therein, the statements set forth in the Prospectus under the caption "United States Federal Income Tax Consequences," insofar as they purport to constitute summaries of matters of United States federal tax laws and regulations or legal conclusions with respect thereto, constitute accurate summaries of the matters described therein in all material respects. Our opinions set forth in paragraphs (d) - (h) above are subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. In addition, our opinion in paragraph (g) is further limited by considerations of public policy. Our opinion set forth in paragraph (m) above is based upon the Internal Revenue Code of 1986, as amended, the Treasury regulations promulgated thereunder and other relevant authorities and law, all as in effect on the date hereof. Consequently, future changes in the law may cause the tax treatment of the transactions referred to herein to be materially different from that described above. We have not independently verified the accuracy, completeness or fairness of the statements made or included in the Registration Statement, the Prospectus or the Exchange Act Documents and take no responsibility therefor, except as and to the extent set forth in paragraphs (l) and (m) above. In the course of the preparation by the Company of the Registration Statement and the Prospectus (excluding the Exchange Act Documents), we participated in conferences with certain officers and employees of the Company, with your representatives, with Underwriters' counsel, Dewey Ballantine LLP, with representatives of Deloitte & Touche LLP and with other counsel to the Company. We did not prepare the Exchange Act Documents; however, we reviewed the Annual Report on Form 10-K for the Company for the fiscal year ended December 31, 2001 prior to its filing with the Commission. Based upon our examination of the Registration Statement, the Prospectus and the Exchange Act Documents, our investigations made in connection with the preparation of the Registration Statement and the Prospectus (excluding the Exchange Act Documents) and our participation in the conferences referred to above, (i) we are of the opinion that the Registration Statement, as of its effective date, and the Prospectus, as of June 5, 2002, complied as to form in all material respects with the requirements of the Act, the Trust Indenture Act and the applicable rules and regulations of the Commission thereunder and that the Exchange Act Documents complied as to form when filed in all material respects with the requirements of the Exchange Act and the applicable rules and regulations of the Commission thereunder, except that in each case we express no opinion with respect to the financial statements or other financial or statistical data contained or incorporated by reference in the Registration Statement, the Prospectus or the Exchange Act Documents, and (ii) we have no reason to believe that the Registration Statement, as of its effective date (including the Exchange Act Documents on file with the Commission on such effective date), contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading or that the Prospectus (including the Exchange Act Documents) contained as of June 5, 2002 or contains any untrue statement of a material fact or omitted as June 5, 2002 or omits to state any material A-1-3 fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that in each case we express no belief with respect to the financial statements or other financial or statistical data contained or incorporated by reference in the Registration Statement, the Prospectus or the Exchange Act Documents. A-1-4 EXHIBIT A-2 OPINION OF THOMAS G. BERKEMEYER, ESQ. (a) The execution, delivery and performance by the Company of the Underwriting Agreement and the Indenture and the other Operative Documents and the consummation by the Company of the transactions contemplated therein and compliance by the Company with their obligations thereunder do not and will not result in any violation of the charter or bylaws of the Company, will not result in the violation of any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, governmental instrumentality or court having jurisdiction over the Company or its properties or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company and do not and will not conflict with, or result in a breach of any of the terms or provisions of, or constitute a default under any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument to which the Company is a party or by which it may be bound or to which any of its properties may be subject (except for conflicts, breaches or defaults which would not, individually or in the aggregate, be materially adverse to the Company or materially adverse to the transactions contemplated by the Underwriting Agreement or the other Operative Documents). (b) The Company has full power and authority to execute and deliver the Indenture and the Supplemental Indenture, and the Indenture and the Supplemental Indenture have been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery thereof by the Trustee, constitutes a valid and legally binding obligation of the Company. (c) The Company has full power and authority to execute and deliver the Notes, and the Notes have been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery thereof by the Trustee, constitute valid and legally binding obligations of the Company. (d) The Company has full power and authority to execute and deliver the Equity Units, and the Equity Units have been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery thereof by the Forward Purchase Contract Agent, constitute valid and legally binding obligations of the Company. (e) The Underwriting Agreement has been duly authorized, executed and delivered by the Company. (f) An appropriate order of the Commission legally required for the issuance and sale of the Securities by the Company under the Public Utility Holding Company Act of 1935, as amended, has been obtained; such order is sufficient for the issuance and sale of the Securities by the Company; and the Commission has issued an appropriate order under the Securities Act of 1933, as amended, with respect to the sale of the Securities. No other approval or consent of any governmental body is required for the issuance and sale of the Securities to you or the performance by the Company of its obligations under the A-2-1 Underwriting Agreement, the Indenture or the Supplemental Indenture. I have not considered whether any approval or consent is required under the blue sky laws of any jurisdiction. A-2-2 EXHIBIT B OPINION OF DEWEY BALLANTINE LLP (a) The Company has been duly incorporated and is validly existing and in good standing as a corporation under the laws of the State of New York and has full corporate power and authority to conduct its business as described in the Registration Statement and Prospectus. (b) An appropriate order of the Commission legally required for the issuance and sale of the Securities by the Company under the Public Utility Holding Company Act of 1935 has been obtained; such order is sufficient for the issuance and sale of the Securities by the Company; and no other order, consent or other authorization or approval of any United States federal or New York State governmental body (other than in connection or in compliance with the previsions of the securities or "blue sky" laws of any jurisdiction, as to which we express no opinion) not already obtained is legally required for the issuance and sale of the Securities by the Company in accordance with the terms of the Underwriting Agreement, the performance by the Company of its obligations with respect to the Securities and under the Underwriting Agreement and the Indenture. (c) The Underwriting Agreement has been duly authorized, executed and delivered by the Company. (d) The Indenture has been duly authorized, executed and delivered by the Company and duly qualified under the Trust Indenture Act and, assuming that the Indenture is the valid and legally binding obligation of the Trustee, constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms. (e) The Forward Purchase Contract Agreement has been duly authorized by the Company and, when validly executed and delivered by the Company, and assuming that the Forward Purchase Contract Agreement is the valid and legally binding obligation of the Forward Purchase Contract Agent, the Forward Purchase Contract Agreement constitutes a valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms. (f) The Pledge Agreement has been duly authorized by the Company and, when validly executed and delivered by the Company, and assuming that the Pledge Agreement is the valid and legally binding obligation of each of the Collateral Agent and the Forward Purchase Contract Agent, the Pledge Agreement constitutes a valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms. (g) The Remarketing Agreement has been duly authorized by the Company and, when validly executed and delivered by the Company, and assuming that the Remarketing Agreement is the valid and legally binding obligation of the Remarketing Agent, constitutes a valid and binding obligation of the Company enforceable against the Company in B-1 accordance with its terms. (h) The Notes have been duly authorized and executed and issued by the Company and, assuming due authentication thereof by the Trustee and upon payment and delivery in accordance with the Underwriting Agreement, will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms and entitled to the benefits of the Indenture. (i) The shares of Common Stock to be issued and sold by the Company pursuant to the Forward Purchase Contract Agreement have been duly authorized and reserved for issuance upon settlement of the Forward Purchase Contracts and, when issued and delivered in accordance with the provisions of the Forward Purchase Contract Agreement, will be validly issued, fully paid and non-assessable. There are no preemptive rights under federal or New York law to subscribe for or to purchase such shares of Common Stock; there are no preemptive or other rights to subscribe for or to purchase such shares of Common Stock pursuant to the Restated Certificate of Incorporation or By-Laws of the Company. (j) The Equity Units have been duly authorized, and, upon payment and delivery in accordance with the Underwriting Agreement, the Equity Units will be validly issued, and, assuming that the Forward Purchase Contracts and the Forward Purchase Contract Agreement are the valid and legally binding obligations of the Forward Purchase Contract Agent and the Forward Purchase Contracts have been duly authenticated by the Forward Purchase Contract Agent, the Forward Purchase Contracts will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms and entitled to the benefits of the Forward Purchase Contract Agreement; there are no preemptive rights under federal or New York law or under the Delaware General Corporation Law to subscribe for or to purchase Equity Units; there are no preemptive or other rights to subscribe for or to purchase Equity Units pursuant to the Restated Certificate of Incorporation or By-Laws of the Company. (k) The statements made in the Prospectus under the captions "Description of the Equity Units," "Description of the Senior Notes" and "Description of the Stock Purchase Contracts and the Stock Purchase Units," insofar as they purport to constitute summaries of certain terms of documents referred to therein, constitute accurate summaries of the terms of such documents in all material respects. A-2-2 EXHIBIT C OPINION OF PILLSBURY WINTHROP LLP (a) The Bank of New York is a banking corporation validly existing under the laws of the State of New York with corporate power and authority to enter into and perform its obligations under the Indenture, Forward Purchase Contract Agreement and Pledge Agreement. (b) Each of the Indenture, Forward Purchase Contract Agreement and Pledge Agreement has been duly authorized, executed and delivered by The Bank of New York and constitutes a valid and binding agreement of The Bank of New York enforceable against The Bank of New York in accordance with its terms, except as may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and general equitable principles (whether considered in a proceeding in equity or at law) and by an implied covenant of good faith and fair dealing. C-1 EXHIBIT D LETTER FROM DELOITTE & TOUCHE DATED AS OF THE DATE OF THIS AGREEMENT D-1 EXHIBIT E E.R. Brooks Donald M. Carlton John P. DesBarres E. Linn Draper Henry W. Fayne Robert W. Fri William R. Howell Lester A. Hudson, Jr. Leonard J. Kujawa Robert P. Powers Richard L. Sandor Thomas V. Shockley, III Donald G. Smith Linda Gillespie Stuntz Kathryn D. Sullivan Susan Tomasky Joseph H. Vipperman E-1 EXHIBIT F AMERICAN ELECTRIC POWER COMPANY, INC. Lock-Up Agreement June 5, 2002 Goldman, Sachs & Co. J.P. Morgan Securities Inc. Salomon Smith Barney Inc. As Representatives of the several Underwriters Ladies and Gentlemen: This letter is being delivered to you in connection with (i) the proposed Underwriting Agreement (the "Equity Units Underwriting Agreement"), between American Electric Power Company, a New York corporation (the "Company"), and each of you as representatives of a group of Underwriters named therein, relating to an underwritten public offering of up to 6,900,000 9.25% Equity Units (the "Equity Units") of the Company and (ii) the proposed Underwriting Agreement (the "Common Stock Underwriting Agreement" and together with the Equity Units Underwriting Agreement, the "Underwriting Agreements"), between the Company and each of you as representatives of a group of Underwriters named therein, relating to an underwritten public offering of up to 18,240,000 shares of Common Stock, $6.50 par value (the "Shares") of the Company. In order to induce you and the other Underwriters to enter into the Underwriting Agreements, the undersigned will not, without the prior written consent of the Representatives, offer, sell, contract to sell, pledge or otherwise dispose of, (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the undersigned or any affiliate of the undersigned or any person in privity with the undersigned or any affiliate of the undersigned), directly or indirectly, including the filing (or participation in the filing) of a registration statement with the Securities and Exchange Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder with respect to, any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for such capital stock, or publicly announce an intention to effect any such transaction, for a period of 90 days after the date of this Agreement, other than shares of Common Stock disposed of as bona fide gifts approved by the Representatives. F-1 If for any reason the Underwriting Agreements shall be terminated prior to the Closing Date (as defined in the Underwriting Agreements), the agreement set forth above shall likewise be terminated. The undersigned understands that the Company and the Underwriters are relying on this Lock-Up Agreement in proceeding with the offering of the Equity Units and the offering of the shares. The undersigned understands that this Lock-Up Agreement is irrevocable and shall be binding on the undersigned's heirs, legal representatives, successors and assigns. Yours very truly, [Signature of officer or director] [Name of executive officer or director] F-2 EX-1.2 4 dex12.txt EXHIBIT 1.2 Exhibit 1.2 EXECUTION COPY AMERICAN ELECTRIC POWER COMPANY, INC. Underwriting Agreement 16,000,000 Shares* Common Stock ($6.50 par value) Dated June 5, 2002 AGREEMENT made between AMERICAN ELECTRIC POWER COMPANY, INC., a corporation organized and existing under the laws of the State of New York (the "Company"), and the several persons, firms and corporations (the "Underwriters") named in Exhibit 1 hereto. WITNESSETH: WHEREAS, the Company proposes to sell to the Underwriters 16,000,000 shares of common stock, $6.50 par value ("Common Stock"), of the Company (the "Underwritten Shares"); and WHEREAS, the Company also proposes to grant to the Underwriters an option to purchase up to an additional 2,400,000 shares of Common Stock to cover over-allotments (the "Option Shares"; the Option Shares, together with the Underwritten Shares, being hereinafter called the "Shares"); and WHEREAS, the Underwriters have designated the persons signing this Agreement (collectively, the "Representatives") to execute this Agreement on behalf of the respective Underwriters and to act for the respective Underwriters in the manner provided in this Agreement; and WHEREAS, the Company has prepared and filed, in accordance with the provisions of the Securities Act of 1933 (the "Act"), with the Securities and Exchange Commission (the "Commission"), a registration statement (File No. 333-86050) and a prospectus relating to $3,000,000,000 principal amount of its securities, including the Shares, and such registration statement has become effective; and WHEREAS, such registration statement, including the financial statements, the documents incorporated or deemed incorporated therein by reference, the exhibits thereto, being herein called - ------------------------- * Plus an option to purchase from American Electric Power Company, Inc. up to 240,000 additional shares to cover over-allotments. the Registration Statement, and the prospectus, including the documents incorporated or deemed incorporated therein by reference, constituting a part of such Registration Statement, as it may be last amended or supplemented prior to the effectiveness of this Agreement, being herein called the Basic Prospectus, and the Basic Prospectus, as supplemented by a preliminary prospectus supplement (the "Preliminary Prospectus Supplement") and a final prospectus supplement (the "Prospectus Supplement") to include information relating to the Shares, including the names of the Underwriters, the price and terms of the offering, the interest rate, maturity date and certain other information relating to the Shares, which will be filed with the Commission pursuant to Rule 424(b) of the Commission's General Rules and Regulations under the Act (the "Rules"), including all documents then incorporated or deemed to have been incorporated therein by reference, being herein called the "Prospectus." NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, it is agreed between the parties as follows: 1. Purchase and Sale: (a) Upon the basis of the warranties and representations and on the terms and subject to the conditions herein set forth, the Company agrees to sell to the respective Underwriters named in Exhibit 1 hereto, severally and not jointly, and the respective Underwriters, severally and not jointly, agree to purchase from the Company, the respective number of Underwritten Shares set opposite their names in Exhibit 1 hereto, together aggregating all of the Underwritten Shares, at a purchase price equal to $39.673 per Security. (b) Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company hereby grants an option to the several Underwriters to purchase, severally and not jointly, not more than 2,400,000 Option Shares at the same purchase price per share as the Underwriters shall pay for the Underwritten Shares. Said option may be exercised only to cover over-allotments in the sale of the Underwritten Shares by the Underwriters. Said option may be exercised one time, in whole or in part on or before the 30th day after the date of the Prospectus. Said option shall be exercised upon written or telegraphic notice by the Representatives to the Company setting forth the number of shares of the Option Shares as to which the several Underwriters are exercising the option and the settlement date. The number of shares of the Option Shares to be purchased by each Underwriter shall be the same percentage of the total number of shares of the Option Shares to be purchased by the several Underwriters as such Underwriter is purchasing of the Underwritten Shares, subject to such adjustments as you in your absolute discretion shall make to eliminate any fractional shares. 2. Payment and Delivery: Delivery of and payment for the Underwritten Shares and the Option Shares (if the option provided for in Section 1(b) hereof shall have been exercised on or before the third Business Day prior to the Closing Date) shall be made at the offices of Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, New York 10017, or at such other place as shall be agreed upon by the Representatives and the Company, at 10:00 a.m., New York City time, on June 11, 2002, or at such time on such later date not more than three Business Days after the foregoing date as the Representatives shall designate, which date and time may be postponed by agreement between the Representatives and the Company or as provided in Section 8 hereof (such date and time of delivery and payment for the Shares being herein called the "Closing 2 Date"). Delivery of the Shares shall be made to the Representatives for the respective accounts of the several Underwriters against payment by the several Underwriters through the Representatives of the purchase price thereof to or upon the order of the Company by wire transfer payable in same-day funds to an account specified by the Company. Delivery of the Underwritten Shares and the Option Shares shall be made through the facilities of The Depository Trust Company unless the Representatives shall otherwise instruct. If the option provided for in Section 1(b) hereof is exercised after the third Business Day prior to the Closing Date, the Company will deliver the Option Shares (at the expense of the Company) to the Representatives, at 388 Greenwich Street, New York, New York, on the date specified by the Representatives (which shall be within three Business Days after exercise of said option) for the respective accounts of the several Underwriters, against payment by the several Underwriters through the Representatives of the purchase price thereof to or upon the order of the Company by wire transfer payable in same-day funds to an account specified by the Company. If settlement for the Option Shares occurs after the Closing Date, the Company will deliver to the Representatives on the settlement date for the Option Shares, and the obligation of the Underwriters to purchase the Option Shares shall be conditioned upon receipt of, supplemental opinions, certificates and letters confirming as of such date the opinions, certificates and letters delivered on the Closing Date pursuant to Section 3 hereof. Any settlement date for the Option Securities after the Closing Date shall be such date as the Company and the Representatives may agree, but in no event shall such date be sooner than the third Business Day following the exercise of the option provided for in Section 1(b) hereof. 3. Conditions of Underwriters' Obligations: The several obligations of the Underwriters hereunder to purchase Underwritten Shares and the Option Shares, as the case may be, are subject to the accuracy of the warranties and representations on the part of the Company on the date hereof and at the Closing Date, and if applicable, the settlement date pursuant to Section 2 hereof, and to the following other conditions: (a) That all legal proceedings to be taken and all legal opinions to be rendered in connection with the sale of the Shares shall be satisfactory in form and substance to Dewey Ballantine LLP, counsel to the Underwriters and the Company shall have furnished such counsel all documents and information that it may reasonably request to enable it to pass upon such matters. (b) That, at the Closing Date, the Representatives shall be furnished with the following opinions, dated the day of the Closing Date, with conformed copies or signed counterparts thereof for the other Underwriters, with such changes therein as may be agreed upon by the Company and the Representatives with the approval of Dewey Ballantine LLP, counsel to the Underwriters: (i) Opinion of Simpson Thacher & Bartlett, substantially in the form attached hereto as Exhibit A-1, and either of Thomas G. Berkemeyer, Esq. or William E. Johnson, Esq., counsel to the Company, substantially in the form attached hereto as Exhibit A-2; 3 (ii) Opinion of Dewey Ballantine LLP, counsel to the Underwriters, substantially in the form attached hereto as Exhibit B; (c) That the Representatives shall have received letters from: (i) Arthur Andersen LLP in form and substance satisfactory to the Representatives, dated as of May 24, 2002, (i) confirming that they are independent certified public accountants within the meaning of the Act and the applicable published rules and regulations of the Commission thereunder and (ii) stating that in their opinion the financial statements audited by them and incorporated by reference in the Registration Statement complied as to form in all material respects with the then applicable accounting requirements of the Commission,including the applicable published rules and regulations of the Commission; and (ii) KPMG Audit plc in form and substance satisfactory to the Representatives, dated as of the Closing Date, (i) confirming that they are independent certified public accountants within the meaning of the Act and the applicable published rules and regulations of the Commission thereunder and (ii) stating that in their opinion the financial statements audited by them and incorporated by reference in the Registration Statement complied as to form in all material respects with the then applicable accounting requirements of the Commission, including the applicable published rules and regulations of the Commission; and (iii) Deloitte & Touche LLP in form and substance satisfactory to the Representatives, (A) dated as of the date of this Agreement and substantially in the form of Exhibit C hereto and (B) dated as of the Closing Date, reaffirming the statements made in the letter furnished pursuant to clause (A) above, except that the specified date referred to shall be a date not more than five business days prior to the Closing Date. (d) That no amendment to the Registration Statement and that no prospectus or prospectus supplement of the Company (other than the prospectus or amendments, prospectuses or prospectus supplements relating solely to securities other than the Shares) relating to the Shares and no document which would be deemed incorporated in the Prospectus by reference filed subsequent to the date hereof and prior to the Closing Date shall contain material information substantially different from that contained in the Registration Statement which is unsatisfactory in substance to the Representatives or unsatisfactory in form to Dewey Ballantine LLP, counsel to the Underwriters. (e) That, at the Closing Date, an appropriate order of the Commission under the Public Utility Holding Company Act of 1935, as amended (the "1935 Act") necessary to permit the sale of the Shares to the Underwriters, shall be in effect; and that, prior to the 4 Closing Date, no stop order with respect to the effectiveness of the Registration Statement shall have been issued under the Act by the Commission or proceedings therefor initiated. (f) That, at the Closing Date, there shall not have been any material adverse change in the business, properties or financial condition of the Company from that set forth in the Prospectus (other than changes referred to in or contemplated by the Prospectus), and that the Company shall, at the Closing Date, have delivered to the Representatives a certificate of an executive officer of the Company to the effect that, to the best of his knowledge, information and belief, there has been no such change. (g) That the Company shall have performed such of its obligations under this Agreement as are to be performed at or before the Closing Date by the terms hereof. (h) Subsequent to the date of this Agreement, there shall not have been decreases in the ratings of the Company's senior unsecured debt securities by both Moody's Investors Services, Inc. ("Moody's") and Standard & Poor's Ratings Group ("S&P") as follows: (i) a decrease by Moody's to a rating of Baa3 or below and (ii) a decrease by S&P to a rating of BBB- or below. (i) That, at the Closing Date, the Shares shall have been approved for listing on the New York Stock Exchange, subject to official notice of issuance, and satisfactory evidence of such actions shall have been provided to the Representatives. (j) That, at the Closing Date, each of the executive officers and directors of the Company listed in Exhibit D shall have entered into an agreement substantially in the form attached hereto as Exhibit E. In case any of the conditions specified in this Section 3 shall not have been fulfilled, this Agreement may be terminated by the Underwriters at any time at or prior to the Closing Date upon written notice thereof to the Company. Any such termination shall be without liability of any party to any other party except as otherwise provided in Section 4(f), Section 4(g) and Section 4(h) hereof and except for any liability under Section 7 hereof. 4. Certain Covenants of the Company: In further consideration of the agreements of the Underwriters herein contained, the Company covenants as follows: (a) As soon as practicable, and in any event within the time prescribed by Rule 424 under the Act, to file the Prospectus with the Commission; as soon as the Company is advised thereof, to advise the Representatives and confirm the advice in writing of any request made by the Commission for amendments to the Registration Statement or Prospectus or for additional information with respect thereto or of the entry of a stop order suspending the effectiveness of the Registration Statement or of the initiation or threat of any proceedings for that purpose and, if such a stop order should be entered by the Commission, to make every reasonable effort to obtain the prompt lifting or removal thereof. (b) To deliver to the Underwriters, without charge, as soon as practicable (and in any event within 24 hours after the date hereof), and from time to time thereafter during 5 such period of time (not exceeding nine months) after the date hereof as they are required by law to deliver a prospectus, as many copies of the Prospectus (as supplemented or amended if the Company shall have made any supplements or amendments thereto, other than supplements or amendments relating solely to securities other than the Shares) as the Representatives may reasonably request; and in case any Underwriter is required to deliver a prospectus after the expiration of nine months after the date hereof, to furnish to any Underwriter, upon request, at the expense of such Underwriter, a reasonable quantity of a supplemental prospectus or of supplements to the Prospectus complying with Section 10(a)(3) of the Act. (c) To furnish to the Representatives, upon request, a copy, certified by the Secretary or an Assistant Secretary of the Company, of the Registration Statement as initially filed with the Commission and of all amendments thereto (exclusive of exhibits), other than amendments relating solely to securities other than the Shares and, upon request, to furnish to the Representatives sufficient plain copies thereof (exclusive of exhibits) for distribution of one to the other Underwriters. (d) For such period of time after the date hereof as they are required by law to deliver a prospectus, if any event shall have occurred as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not contain any untrue statement of a material fact or not omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading, immediately to notify the Underwriters of such event and forthwith to prepare and furnish, at its own expense during the period ending nine months from the date of this Agreement, and thereafter at the Underwriters' expense, to the Underwriters and to dealers (whose names and addresses are furnished to the Company by the Representatives) to whom principal amounts of the Shares may have been sold by the Representatives for the accounts of the Underwriters and, upon request, to any other dealers making such request, copies of such amendments to the Prospectus or supplements to the Prospectus. (e) As soon as practicable, the Company will make generally available to its security holders and to the Underwriters an earnings statement or statement of the Company and its subsidiaries which will satisfy the provisions of Section 11(a) of the Act and Rule 158 under the Act. (f) To use its best efforts to qualify the Shares for offer and sale under the securities or "blue sky" laws of such jurisdictions as the Representatives may designate within six months after the date hereof and itself to pay, or to reimburse the Underwriters and their counsel for, reasonable filing fees and expenses in connection therewith in an amount not exceeding $3,500 in the aggregate (including filing fees and expenses paid and incurred prior to the effective date hereof), provided, however, that the Company shall not be required to qualify as a foreign corporation or to file a consent to service of process or to file annual reports or to comply with any other requirements deemed by the Company to be unduly burdensome. 6 (g) To pay all expenses, fees and taxes (other than transfer taxes on resales of the Shares by the respective Underwriters, but including all amounts relating to (i) the Company's costs and expenses for travel, lodging and incidental expenses relating to investor presentations on any "road show" undertaken in connection with the marketing of the Shares; (ii) the listing of the Shares on the New York Stock Exchange; (iii) the preparation of the Registration Statement, the Preliminary Prospectus Supplement and the Prospectus Supplement (and any amendments or supplements thereto); (iv) the sale and delivery of the Shares; (v) the reasonable fees and disbursements of counsel and accountants for the Company; and (vi) the printing and delivery of the Preliminary Prospectus Supplement and the Prospectus Supplement) in connection with the sale and delivery of the Shares, except that the Company shall be required to pay the fees and disbursements (other than disbursements referred to in paragraph (f) of this Section 4) of Dewey Ballantine LLP, counsel to the Underwriters, only in the events provided in paragraph (h) of this Section 4, the Underwriters hereby agreeing to pay such fees and disbursements in any other event. (h) If the Underwriters shall not take up and pay for the Shares due to the failure of the Company to comply with any of the conditions specified in Section 3 hereof, or, if this Agreement shall be terminated in accordance with the provisions of Section 9(b) or 13(ii) hereof, to pay the fees and disbursements of Dewey Ballantine LLP, counsel to the Underwriters, and, to reimburse the Underwriters for their reasonable out-of-pocket expenses, in an aggregate amount not exceeding a total of $50,000, incurred in connection with the financing contemplated by this Agreement. (i) To use its best efforts to cause the Shares to be accepted for clearance and settlement through the facilities of The Depositary Trust Company. (j) The Company will timely file any certificate required by the 1935 Act in connection with the sale of the Shares. (k) The Company will not, without the prior written consent of the Representatives, offer, sell, contract to sell, pledge, or otherwise dispose of, (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the Company or any affiliate of the Company or any person in privity with the Company or any affiliate of the Company) directly or indirectly, including the filing (or participation in the filing) of a registration statement with the Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Rule 16a-1 under the 1934 Act, any shares of Common Stock or any securities convertible into, or exercisable, or exchangeable for, shares of Common Stock other than as provided in this Agreement; or publicly announce an intention to effect any such transaction, for a period of 90 days after the date of the Underwriting Agreement, provided, however, that (i) the Company may issue and sell its 9.25% Equity Units in the concurrent offering contemplated by the Prospectus and (ii) the Company may issue and sell Common Stock pursuant to the terms of any employee stock option plan, stock ownership plan, dividend reinvestment plan or any other similar plan of the Company in effect as of the date hereof and the Company may issue Common Stock 7 issuable upon the conversion of securities or the exercise of warrants outstanding as of the date hereof. (l) To use its reasonable efforts to effect the listing of the Shares on the New York Stock Exchange. 5. Representations and Warranties of by the Company: The Company represents and warrants to, and agrees with each Underwriter, as set forth below: (a) The Registration Statement on its effective date complied, or was deemed to comply, with the applicable provisions of the Act and the rules and regulations of the Commission and the Registration Statement at its effective date did not, and at the Closing Date will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Basic Prospectus on the date of this Agreement and the Prospectus when first filed in accordance with Rule 424(b) complies, and at the Closing Date the Prospectus will comply, with the applicable provisions of the Act, and the rules and regulations of the Commission, the Basic Prospectus on the date of this Agreement and the Prospectus when first filed in accordance with Rule 424(b) under the Act do not, and the Prospectus at the Closing Date will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the Company makes no warranty or representation to the Underwriters with respect to any statements or omissions made in the Registration Statement, the Basic Prospectus or the Prospectus in reliance upon and in conformity with information furnished in writing to the Company by, or through the Representatives on behalf of, any Underwriter expressly for use in the Registration Statement, the Basic Prospectus or Prospectus. (b) The documents incorporated by reference in the Registration Statement or Prospectus, when they were filed with the Commission, complied in all material respects with the applicable provisions of the 1934 Act and the rules and regulations of the Commission thereunder, and as of such time of filing, when read together with the Prospectus, none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (c) Since the respective dates as of which information is given in the Registration Statement and the Prospectus, except as otherwise referred to or contemplated therein, there has been no material adverse change in the business, properties or financial condition of the Company. (d) This Agreement has been duly authorized, executed and delivered by the Company. (e) The execution, delivery and performance of this Agreement, the issuance of the Shares and the consummation by the Company of the transactions contemplated herein 8 is not in violation of its charter or bylaws, will not result in the violation of any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, governmental instrumentality or court having jurisdiction over the Company or its properties and will not conflict with, or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company under any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument to which the Company is a party or by which it may be bound or to which any of its properties may be subject (except for conflicts, breaches or defaults which would not, individually or in the aggregate, be materially adverse to the Company or materially adverse to the transactions contemplated by this Agreement). (f) The Shares have been duly authorized and, when issued and delivered in accordance with the provisions of this Agreement, will be duly and validly issued, fully paid and non-assessable. (g) No authorization, approval, consent or order of any court or governmental authority or agency is necessary in connection with the issuance and sale by the Company of the Shares or the transactions by the Company contemplated in this Agreement, except (A) such as may be required under the 1933 Act or the rules and regulations thereunder; (B) such as may be required under the 1935 Act; and (C) such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws. (h) The Company and each "significant subsidiary" of the Company (as such term is defined in Rule 1-02 of Regulation S-X promulgated under the Act) has been duly organized and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation. (i) The consolidated financial statements of the Company and its consolidated subsidiaries together with the notes thereto, included or incorporated by reference in the Prospectus present fairly the financial position of the Company at the dates or for the periods indicated; said consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles applied, apart from reclassifications disclosed therein, on a consistent basis throughout the periods involved; and the selected consolidated financial information of the Company included in the Prospectus present fairly the information shown therein and have been compiled, apart from reclassifications disclosed therein, on a basis consistent with that of the audited financial statements of the Company included or incorporated by reference in the Prospectus. (j) There is no pending action, suit, investigation, litigation or proceeding, including, without limitation, any environmental action, affecting the Company or any of its "significant subsidiaries" before any court, governmental agency or arbitration that is reasonably likely to have a material adverse effect on the business, properties, financial condition or results of operations of the Company, except as disclosed in the Prospectus. The Company's covenants, warranties and representations contained in this Agreement, 9 shall remain in full force and effect regardless of any investigation made by or on behalf of any person, and shall survive the delivery of and payment for the Shares hereunder. 6. Warranties of Underwriters: (a) Each Underwriter warrants and represents that the information furnished in writing to the Company through the Representatives for use in the Registration Statement, in the Basic Prospectus, in the Prospectus, or in the Prospectus as amended or supplemented is correct as to such Underwriter. (b) Each of the Underwriters represents and agrees that it has not and will not offer, sell or delivery any of the Shares directly or indirectly, or distribute the Prospectus or any other offering material relating to the Shares, in or from any jurisdiction except under circumstances that will result in compliance with the applicable laws and regulations thereof and in a manner that will not impose any obligations on the Company except as set forth in this Agreement. The warranties and representations of such Underwriter contained in this Agreement, shall remain in full force and effect regardless of any investigation made by or on behalf of the Company or other person, and shall survive the delivery of and payment for the Shares hereunder. 7. Indemnification and Contribution: (a) To the extent permitted by law, the Company agrees to indemnify and hold you harmless and each person, if any, who controls you within the meaning of Section 15 of the Act, against any and all losses, claims, damages or liabilities, joint or several, to which you, they or any of you or them may become subject under the Act or otherwise, and to reimburse you and such controlling person or persons, if any, for any legal or other expenses incurred by you or them in connection with defending any action, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any alleged untrue statement or untrue statement of a material fact contained in the Registration Statement, in the Basic Prospectus (if used prior to the effective date of this Agreement), or in the Prospectus, or if the Company shall furnish or cause to be furnished to you any amendments or any supplements to the Prospectus, in the Prospectus as so amended or supplemented except to the extent that such amendments or supplements relate solely to securities other than the Shares (provided that if such Prospectus or such Prospectus, as amended or supplemented, is used after the period of time referred to in Section 4(b) hereof, it shall contain such amendments or supplements as the Company deems necessary to comply with Section 10(a) of the Act), or arise out of or are based upon any alleged omission or omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any such alleged untrue statement or omission, or untrue statement or omission which was made in the Registration Statement, in the Basic Prospectus or in the Prospectus, or in the Prospectus as so amended or supplemented, in reliance upon and in conformity with information furnished in writing to the Company by or through the Representatives expressly for use therein and except that this indemnity shall 10 not inure to your benefit (or of any person controlling you) on account of any losses, claims, damages, liabilities or actions arising from the sale of the Shares to any person if such loss arises from the fact that a copy of the Prospectus, as the same may then be supplemented or amended to the extent such Prospectus was provided to you by the Company (excluding, however, any document then incorporated or deemed incorporated therein by reference), was not sent or given by you to such person with or prior to the written confirmation of the sale involved and the alleged omission or alleged untrue statement or omission or untrue statement was corrected in the Prospectus as supplemented or amended at the time of such confirmation, and such Prospectus, as amended or supplemented, was timely delivered to you by the Company prior to the written confirmation of the sale involved. You agree promptly after the receipt by you of written notice of the commencement of any action in respect to which indemnity from the Company on account of its agreement contained in this Section 7(a) may be sought by you, or by any person controlling you, to notify the Company in writing of the commencement thereof, but your omission so to notify the Company of any such action shall not release the Company from any liability which it may have to you or to such controlling person otherwise than on account of the indemnity agreement contained in this Section 7(a). In case any such action shall be brought against you or any such person controlling you and you shall notify the Company of the commencement thereof, as above provided, the Company shall be entitled to participate in, and, to the extent that it shall wish, including the selection of counsel (such counsel to be reasonably acceptable to the indemnified party), to direct the defense thereof at its own expense. In case the Company elects to direct such defense and select such counsel (hereinafter, Company's counsel), you or any controlling person shall have the right to employ your own counsel, but, in any such case, the fees and expenses of such counsel shall be at your expense unless (i) the Company has agreed in writing to pay such fees and expenses or (ii) the named parties to any such action (including any impleaded parties) include both you or any controlling person and the Company and you or any controlling person shall have been advised by your counsel that a conflict of interest between the Company and you or any controlling person may arise (and the Company's counsel shall have concurred in good faith with such advice) and for this reason it is not desirable for the Company's counsel to represent both the indemnifying party and the indemnified party (it being understood, however, that the Company shall not, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys for you or any controlling person (plus any local counsel retained by you or any controlling person in their reasonable judgment), which firm (or firms) shall be designated in writing by you or any controlling person). (b) Each Underwriter agrees, to the extent permitted by law, to indemnify, hold harmless and reimburse the Company, its directors and such of its officers as shall have signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the Act, to the same extent and upon the same terms as the indemnity agreement of the Company set forth in Section 7(a) hereof, but only with respect to untrue statements or alleged untrue statements or omissions or alleged omissions made in the Registration Statement, or in the Basic Prospectus, or in the Prospectus, or in the Prospectus as so amended or supplemented, in reliance upon and in conformity with information furnished in writing to the Company by the Representatives on behalf of such 11 Underwriter expressly for use therein. The Company agrees promptly after the receipt by it of written notice of the commencement of any action in respect to which indemnity from you on account of your agreement contained in this Section 7(b) may be sought by the Company, or by any person controlling the Company, to notify you in writing of the commencement thereof, but the Company's omission so to notify you of any such action shall not release you from any liability which you may have to the Company or to such controlling person otherwise than on account of the indemnity agreement contained in this Section 7(b). (c) If recovery is not available or insufficient under Section 7(a) or 7(b) hereof for any reason other than as specified therein, the indemnified party shall be entitled to contribution for any and all losses, claims, damages, liabilities and expenses for which such indemnification is so unavailable or insufficient under this Section 7(c). In determining the amount of contribution to which such indemnified party is entitled, there shall be considered the portion of the proceeds of the offering of the Shares realized, the relative knowledge and access to information concerning the matter with respect to which the claim was asserted, the opportunity to correct and prevent any statement or omission, and any equitable considerations appropriate under the circumstances. The Company and the Underwriters agree that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation (even if the Underwriters were treated as one entity for such purpose) without reference to the considerations called for in the previous sentence. No Underwriter or any person controlling such Underwriter shall be obligated to contribute any amount or amounts hereunder which in the aggregate exceeds the total price of the Shares purchased by such Underwriter under this Agreement, less the aggregate amount of any damages which such Underwriter and its controlling persons have otherwise been required to pay in respect of the same claim or any substantially similar claim. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. An Underwriter's obligation to contribute under this Section 7 is in proportion to its purchase obligation and not joint with any other Underwriter. (d) No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which contribution could be sought under this Section 7 (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of such indemnified party. (e) In no event shall any indemnifying party have any liability or responsibility in respect of the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim effected without its prior written consent. The agreements contained in Section 7 hereof shall remain in full force and effect 12 regardless of any investigation made by or on behalf of any person, and shall survive the delivery of and payment for the Shares hereunder. 8. Default of Underwriters: If any Underwriter under this Agreement shall fail or refuse (otherwise than for some reason sufficient to justify, in accordance with the terms hereof, the cancellation or termination of its obligations hereunder) to purchase and pay for the number of Shares which it has agreed to purchase and pay for hereunder, and the number of Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the number of the Shares, the other Underwriters shall be obligated severally in the proportions which the number of Shares set forth opposite their names in Exhibit 1 hereto bear to the number of Shares set forth opposite the names of all such non-defaulting Underwriters, to purchase the Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on the terms set forth herein; provided that in no event shall the number of Shares which any Underwriter has agreed to purchase pursuant to Section 1 hereof be increased pursuant to this Section 8 by an amount in excess of one-ninth of such number of Shares without the written consent of such Underwriter. In the event of any such purchase, (a) the non-defaulting Underwriters or the Company shall have the right to fix as a postponed Closing Date a date not exceeding four full business days after the date specified in Section 2 and (b) the respective number of Shares to be purchased by the non-defaulting Underwriters shall be taken as the basis of their respective underwriting obligations for all purposes of this Agreement. If any Underwriter or Underwriters shall fail or refuse to purchase Shares and the number of Shares with respect to which such default occurs is more than one-tenth of the number of the Shares then this Agreement shall terminate without liability on the part of any non-defaulting Underwriter; provided, however, that the non-defaulting Underwriters may agree, in their sole discretion, to purchase the Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on the terms set forth herein. In the event of any such termination, the Company shall not be under any liability to any Underwriter (except to the extent, if any, provided in Section 4(h) hereof), nor shall any Underwriter (other than an Underwriter who shall have failed or refused to purchase the Shares without some reason sufficient to justify, in accordance with the terms hereof, its termination of its obligations hereunder) be under any liability to the Company or any other Underwriter. Nothing herein contained shall release any defaulting Underwriter from its liability to the Company or any non-defaulting Underwriter for damages occasioned by its default hereunder. 9. Termination of Agreement by the Underwriters: This Agreement may be terminated at any time prior to the Closing Date by the Representatives if, after the execution and delivery of this Agreement and prior to the Closing Date, in the Representatives' reasonable judgment, the Underwriters' ability to market the Shares shall have been materially adversely affected because: (a) trading in securities on the New York Stock Exchange shall have been generally suspended by the Commission or by the New York Stock Exchange, or 13 (b) trading in the securities of the Company shall have been suspended by the New York Stock Exchange, or (c) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of a national emergency or war or other national or international calamity or crisis, or (d) a general banking moratorium shall have been declared by Federal or New York State authorities. If the Representatives elect to terminate this Agreement, as provided in this Section 9, the Representatives will promptly notify the Company by telephone or by telex or facsimile transmission, confirmed in writing. If this Agreement shall not be carried out by any Underwriter for any reason permitted hereunder, or if the sale of the Shares to the Underwriters as herein contemplated shall not be carried out because the Company is not able to comply with the terms hereof, the Company shall not be under any obligation under this Agreement and shall not be liable to any Underwriter or to any member of any selling group for the loss of anticipated profits from the transactions contemplated by this Agreement (except that the Company shall remain liable to the extent provided in Sections 4(g), 4(h) and 7 hereof) and the Underwriters shall be under no liability to the Company nor be under any liability under this Agreement to one another. 10. Notices: All notices hereunder shall, unless otherwise expressly provided, be in writing and be delivered at or mailed to the following addresses or by telex or facsimile transmission confirmed in writing to the following addresses: if to the Underwriters, to the Representatives at the following firms: Goldman, Sachs & Co. 85 Broad Street New York, New York 10004 Attention: Registration Department J.P. Morgan Securities Inc. 277 Park Avenue New York, New York 10017 Attention: Syndicate Desk Salomon Smith Barney Inc. 388 Greenwich Avenue New York, New York 10013 Attention: Syndicate Department and, if to the Company, to American Electric Power Company, Inc., c/o American Electric Power Service Corporation, 1 Riverside Plaza, Columbus, Ohio 43215, Attention: A. A. Pena, Treasurer, (fax 614/223-1687). 11. Parties in Interest: The agreement herein set forth has been and is made solely for the benefit of the Underwriters, the Company (including the directors thereof 14 and such of the officers thereof as shall have signed the Registration Statement), the controlling persons, if any, referred to in Section 7 hereof, and their respective successors, assigns, executors and administrators, and, except as expressly otherwise provided in Section 8 hereof, no other person shall acquire or have any right under or by the virtue of this Agreement. 12. Definition of Certain Terms: If there be two or more persons, firms or corporations named in Exhibit 1 hereto, the term "Underwriters", as used herein, shall be deemed to mean the several persons, firms or corporations, so named (including the Representatives herein mentioned, if so named) and any party or parties substituted pursuant to Section 8 hereof, and the term "Representative", as used herein, shall be deemed to mean the representative or representatives designated by, or in the manner authorized by, the Underwriters. All obligations of the Underwriters hereunder are several and not joint. If there shall be only one person, firm or corporation named in Exhibit 1 hereto, the term "Underwriters" and the term "Representative", as used herein, shall mean such person, firm or corporation. The term "successors" as used in this Agreement shall not include any purchaser, as such purchaser, of any of the Shares from any of the respective Underwriters. 13. Conditions of the Company's Obligations: The obligations of the Company hereunder are subject to (i) the Underwriters' performance of their obligations hereunder; and (ii) that at the Closing Date the Commission shall have issued an appropriate order under the Act and 1935 Act, and such orders shall remain in full force and effect, authorizing the transactions contemplated hereby. In case these conditions shall not have been fulfilled, this Agreement may be terminated by the Company upon notice thereof to the Underwriters. Any such termination shall be without liability of any party to any other party except as otherwise provided in Sections 4(g), 4(h) and 7 hereof. 14. Offering by Underwriters: It is understood that the several Underwriters propose to offer the Shares for sale to the public as set forth in the Prospectus. 15. Applicable Law: This Agreement will be governed and construed in accordance with the laws of the State of New York. 16. Execution of Counterparts: This Agreement may be executed in several counterparts, each of which shall be regarded as an original and all of which shall constitute one and the same document. 15 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, on the date first above written. AMERICAN ELECTRIC POWER COMPANY, INC. By: /s/ Geoffrey S. Chatas --------------------------------- Name: Geoffrey S. Chatas Title: Assistant Treasurer 16 GOLDMAN, SACHS & CO. By: /s/ Goldman, Sachs & Co. --------------------------------- Name: Alan Levande J.P. MORGAN SECURITIES INC. By: /s/ Michael Tiedemann --------------------------------- Name: Michael Tiedemann SALOMON SMITH BARNEY INC. By: /s/ Henry A. Clark --------------------------------- Name: Henry A. Clark as Representatives and on behalf of the Underwriters named in Exhibit 1 hereto 17 EXHIBIT 1
Name of Underwriter Number of Underwritten Shares to - ------------------- -------------------------------- be Purchased ------------ Goldman, Sachs & Co. 3,800,000 J.P. Morgan Securities Inc. 3,800,000 Salomon Smith Barney Inc. 3,800,000 Banc of America Securities LLC 566,000 Credit Suisse First Boston Corporation 566,000 Lehman Brothers Inc. 566,000 Merrill Lynch, Pierce, Fenner & Smith Incorporated 566,000 UBS Warburg LLC 566,000 A.G. Edwards & Sons, Inc. 295,000 Danske Securities (US), Inc. 295,000 Edward D. Jones & Co., L.P. 295,000 McDonald Investments Inc. 295,000 TD Securities (USA) Inc. 295,000 The Williams Capital Group, L.P. 295,000 TOTAL .......................................................... 16,000,000 ==========
EXHIBIT A-1 OPINION OF SIMPSON THACHER & BARTLETT (a) The Company has been duly incorporated and is validly existing and in good standing as a corporation under the laws of the State of New York and has full corporate power and authority to conduct its business as described in the Registration Statement and Prospectus. (b) An appropriate order of the Commission legally required for the issuance and sale of the Shares by the Company under the Public Utility Holding Company Act of 1935 has been obtained; such order is sufficient for the issuance and sale of the Shares by the Company; and no other order, consent or other authorization or approval of any United States federal or New York State governmental body (other than in connection or in compliance with the previsions of the securities or "blue sky" laws of any jurisdiction, as to which we express no opinion) not already obtained is legally required for the issuance and sale of the Shares by the Company in accordance with the terms of the Underwriting Agreement, the performance by the Company of its obligations with respect to the Shares and under the Underwriting Agreement and the Indenture. (c) The Underwriting Agreement has been duly authorized, executed and delivered by the Company. (d) The Shares have been authorized by the Company, upon payment and delivery in accordance with the Underwriting Agreement, will be validly issued, fully paid and nonassessable. (e) There are no preemptive rights under federal or New York law to subscribe for or to purchase the Shares; there are no preemptive or other rights to subscribe for or to purchase the Shares pursuant to the Restated Certificate of Incorporation or By-Laws of the Company. (f) The issue and sale of the Shares by the Company and the compliance by the Company with all of the provisions of the Underwriting Agreement will not violate any Federal or New York statute or any order known to us issued pursuant to any Federal or New York statute by any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties (except that various consents of, and filings with governmental authorities of, the State of New York may be required to be obtained or made, as the case may be, in connection or compliance with the provisions of the securities or "blue sky" laws of the State of New York). (g) The statements made in the Prospectus under the captions "Description of Common Stock," insofar as they purport to constitute summaries of the terms of the Company's Common Stock (including the Shares), constitute accurate summaries of the terms of such Common Stock in all material respects. A-1-1 (h) Subject to the qualifications, exceptions, assumptions and limitations therein, the statements set forth in the Prospectus under the caption "United States Federal Income Tax Consequences," insofar as they purport to constitute summaries of matters of United States federal tax laws and regulations or legal conclusions with respect thereto, constitute accurate summaries of the matters described therein in all material respects. Our opinion set forth in paragraph (h) above is based upon the Internal Revenue Code of 1986, as amended, the Treasury regulations promulgated thereunder and other relevant authorities and law, all as in effect on the date hereof. Consequently, future changes in the law may cause the tax treatment of the transactions referred to herein to be materially different from that described above. We have not independently verified the accuracy, completeness or fairness of the statements made or included in the Registration Statement, the Prospectus or the Exchange Act Documents and take no responsibility therefor, except as and to the extent set forth in paragraphs (l) and (m) above. In the course of the preparation by the Company of the Registration Statement and the Prospectus (excluding the Exchange Act Documents), we participated in conferences with certain officers and employees of the Company, with your representatives, with Underwriters' counsel, Dewey Ballantine LLP, with representatives of Deloitte & Touche LLP and with other counsel to the Company. We did not prepare the Exchange Act Documents; however, we reviewed the Annual Report on Form 10-K for the Company for the fiscal year ended December 31, 2001 prior to its filing with the Commission. Based upon our examination of the Registration Statement, the Prospectus and the Exchange Act Documents, our investigations made in connection with the preparation of the Registration Statement and the Prospectus (excluding the Exchange Act Documents) and our participation in the conferences referred to above, (i) we are of the opinion that the Registration Statement, as of its effective date, and the Prospectus, as of June 5, 2002, complied as to form in all material respects with the requirements of the Act and the applicable rules and regulations of the Commission thereunder and that the Exchange Act Documents complied as to form when filed in all material respects with the requirements of the Exchange Act and the applicable rules and regulations of the Commission thereunder, except that in each case we express no opinion with respect to the financial statements or other financial or statistical data contained or incorporated by reference in the Registration Statement, the Prospectus or the Exchange Act Documents, and (ii) we have no reason to believe that the Registration Statement, as of its effective date (including the Exchange Act Documents on file with the Commission on such effective date), contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading or that the Prospectus (including the Exchange Act Documents) contained as of June 5, 2002 or contains any untrue statement of a material fact or omitted as June 5, 2002 or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that in each case we express no belief with respect to the financial statements or other financial or statistical data contained or incorporated by reference in the Registration Statement, the Prospectus or the Exchange Act Documents. A-1-2 EXHIBIT A-2 OPINION OF THOMAS G. BERKEMEYER, ESQ. (a) The execution, delivery and performance by the Company of the Underwriting Agreement, the issuance of the Shares and the consummation by the Company of the transactions contemplated therein and compliance by the Company with their obligations thereunder do not and will not result in any violation of the charter or bylaws of the Company will not result in the violation of any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, governmental instrumentality or court having jurisdiction over the Company or its properties or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company and do not and will not conflict with, or result in a breach of any of the terms or provisions of, or constitute a default under any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument to which the Company is a party or by which it may be bound or to which any of its properties may be subject (except for conflicts, breaches or defaults which would not, individually or in the aggregate, be materially adverse to the Company or materially adverse to the transactions contemplated by the Underwriting Agreement). (b) The Underwriting Agreement has been duly authorized, executed and delivered by the Company. (c) An appropriate order of the Commission legally required for the issuance and sale of the Shares by the Company under the Public Utility Holding Company Act of 1935, as amended, has been obtained; such order is sufficient for the issuance and sale of the Shares by the Company; and the Commission has issued an appropriate order under the Securities Act of 1933, as amended, with respect to the sale of the Shares. No other approval or consent of any governmental body is required for the issuance and sale of the Shares to you or the performance by the Company of its obligations under the Underwriting Agreement, the Indenture or the Supplemental Indenture. I have not considered whether any approval or consent is required under the blue sky laws of any jurisdiction. A-2-1 EXHIBIT B OPINION OF DEWEY BALLANTINE LLP (a) The Company has been duly incorporated and is validly existing and in good standing as a corporation under the laws of the State of New York and has full corporate power and authority to conduct its business as described in the Registration Statement and Prospectus. (b) An appropriate order of the Commission legally required for the issuance and sale of the Shares by the Company under the Public Utility Holding Company Act of 1935 has been obtained; such order is sufficient for the issuance and sale of the Shares by the Company; and no other order, consent or other authorization or approval of any United States federal or New York State governmental body (other than in connection or in compliance with the previsions of the securities or "blue sky" laws of any jurisdiction, as to which we express no opinion) not already obtained is legally required for the issuance and sale of the Shares by the Company in accordance with the terms of the Underwriting Agreement, the performance by the Company of its obligations with respect to the Shares and under the Underwriting Agreement and the Indenture. (c) The Underwriting Agreement has been duly authorized, executed and delivered by the Company. (d) The Shares have been authorized by the Company, upon payment and delivery in accordance with the Underwriting Agreement, will be validly issued, fully paid and nonassessable. (e) There are no preemptive rights under federal or New York law to subscribe for or to purchase the Shares; there are no preemptive or other rights to subscribe for or to purchase the Shares pursuant to the Restated Certificate of Incorporation or By-Laws of the Company. (f) The statements made in the Prospectus under the captions "Description of Common Stock," insofar as they purport to constitute summaries of the terms of the Company's Common Stock (including the Shares), constitute accurate summaries of the terms of such Common Stock in all material respects. B-1 EXHIBIT C LETTER FROM DELOITTE & TOUCHE DATED AS OF THE DATE OF THIS AGREEMENT C-1 EXHIBIT D E.R. Brooks Donald M. Carlton John P. DesBarres E. Linn Draper Henry W. Fayne Robert W. Fri William R. Howell Lester A. Hudson, Jr. Leonard J. Kujawa Robert P. Powers Richard L. Sandor Thomas V. Shockley, III Donald G. Smith Linda Gillespie Stuntz Kathryn D. Sullivan Susan Tomasky Joseph H. Vipperman D-1 EXHIBIT E AMERICAN ELECTRIC POWER COMPANY, INC. Lock-Up Agreement June 5, 2002 Goldman, Sachs & Co. J.P. Morgan Securities Inc. Salomon Smith Barney Inc. As Representatives of the several Underwriters Ladies and Gentlemen: This letter is being delivered to you in connection with (i) the proposed Underwriting Agreement (the "Equity Units Underwriting Agreement"), between American Electric Power Company, a New York corporation (the "Company"), and each of you as representatives of a group of Underwriters named therein, relating to an underwritten public offering of up to 6,900,000 9.25% Equity Units (the "Equity Units") of the Company and (ii) the proposed Underwriting Agreement (the "Common Stock Underwriting Agreement" and together with the Equity Units Underwriting Agreement, the "Underwriting Agreements"), between the Company and each of you as representatives of a group of Underwriters named therein, relating to an underwritten public offering of up to 18,240,000 shares of Common Stock, $6.50 par value (the "Shares") of the Company. In order to induce you and the other Underwriters to enter into the Underwriting Agreements, the undersigned will not, without the prior written consent of the Representatives, offer, sell, contract to sell, pledge or otherwise dispose of, (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the undersigned or any affiliate of the undersigned or any person in privity with the undersigned or any affiliate of the undersigned), directly or indirectly, including the filing (or participation in the filing) of a registration statement with the Shares and Exchange Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder with respect to, any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for such capital stock, or publicly announce an intention to effect any such transaction, for a period of 90 days after the date of this Agreement, other than shares of Common Stock disposed of as bona fide gifts approved by the Representatives. E-1 If for any reason the Underwriting Agreements shall be terminated prior to the Closing Date (as defined in the Underwriting Agreements), the agreement set forth above shall likewise be terminated. The undersigned understands that the Company and the Underwriters are relying on this Lock-Up Agreement in proceeding with the offering of the Equity Units and the offering of the shares. The undersigned understands that this Lock-Up Agreement is irrevocable and shall be binding on the undersigned's heirs, legal representatives, successors and assigns. Yours very truly, [Signature of executive officer or director] [Name of executive officer or director] E-2 EX-4.1 5 dex41.txt EXHIBIT 4.1 Exhibit 4.1 AMERICAN ELECTRIC POWER COMPANY, INC. AND THE BANK OF NEW YORK AS FORWARD PURCHASE CONTRACT AGENT FORWARD PURCHASE CONTRACT AGREEMENT Dated as of June 11, 2002 Table of Contents
Page ARTICLE I. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION ......................... 1 Section 1.1 Definitions ............................................................ 1 Section 1.2 Compliance Certificates and Opinions ................................... 13 Section 1.3 Form of Documents Delivered to Agent ................................... 14 Section 1.4 Acts of Holders; Record Dates .......................................... 14 Section 1.5 Notices ................................................................ 16 Section 1.6 Notice to Holders; Waiver .............................................. 16 Section 1.7 Effect of Headings and Table of Contents ............................... 17 Section 1.8 Successors and Assigns ................................................. 17 Section 1.9 Separability Clause .................................................... 17 Section 1.10 Benefits of Agreement .................................................. 17 Section 1.11 Governing Law .......................................................... 17 Section 1.12 Legal Holidays ......................................................... 17 Section 1.13 Counterparts ........................................................... 18 Section 1.14 Inspection of Agreement ................................................ 18 ARTICLE II. CERTIFICATE FORMS .............................................................. 18 Section 2.1 Forms of Certificates Generally ........................................ 18 Section 2.2 Form of Agent's Certificate of Authentication .......................... 19 ARTICLE III. THE EQUITY UNITS .............................................................. 20 Section 3.1 Title and Terms; Denominations ......................................... 20 Section 3.2 Rights and Obligations Evidenced by the Certificates ................... 20 Section 3.3 Execution, Authentication, Delivery and Dating ......................... 21 Section 3.4 Temporary Certificates ................................................. 22 Section 3.5 Registration; Registration of Transfer and Exchange .................... 22 Section 3.6 Book-Entry Interests ................................................... 24 Section 3.7 Notices To Holders ..................................................... 24 Section 3.8 Appointment of Successor Clearing Agency ............................... 24 Section 3.9 Definitive Certificates ................................................ 24 Section 3.10 Mutilated, Destroyed, Lost and Stolen Certificates ..................... 25 Section 3.11 Persons Deemed Owners .................................................. 26 Section 3.12 Cancellation ........................................................... 27 Section 3.13 Establishment of Stripped Units ........................................ 27 Section 3.14 Reestablishment of Equity Units ........................................ 28 Section 3.15 Transfer of Collateral Upon Occurrence of Termination Event ............ 30 Section 3.16 No Consent to Assumption ............................................... 30 ARTICLE IV. THE NOTES ...................................................................... 30 Section 4.1 Payment of Interest; Rights to Interest Payments Preserved; Notice ..... 30 Section 4.2 Notice and Voting ...................................................... 31 Section 4.3 Tax Event Redemption ................................................... 32
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Page ---- ARTICLE V. THE FORWARD PURCHASE CONTRACTS; THE REMARKETING .................................. 32 Section 5.1 Purchase of Shares of Common Stock. ...................................... 32 Section 5.2 Contract Adjustment Payments ............................................. 34 Section 5.3 Deferral of Contract Adjustment Payments ................................. 35 Section 5.4 Payment of Purchase Price; Remarketing ................................... 37 Section 5.5 Issuance of Shares of Common Stock ....................................... 42 Section 5.6 Adjustment of Settlement Rate ............................................ 42 Section 5.7 Notice of Adjustments and Certain Other Events ........................... 49 Section 5.8 Termination Event; Notice ................................................ 50 Section 5.9 Early Settlement ......................................................... 50 Section 5.10 Early Settlement Upon Merger ............................................. 52 Section 5.11 Charges and Taxes ........................................................ 53 Section 5.12 No Fractional Shares ..................................................... 54 Section 5.13 Tax Treatment ............................................................ 54 ARTICLE VI. REMEDIES ........................................................................ 54 Section 6.1 Unconditional Right of Holders to Purchase Common Stock .................. 54 Section 6.2 Restoration of Rights and Remedies ....................................... 55 Section 6.3 Rights and Remedies Cumulative ........................................... 55 Section 6.4 Delay or Omission Not Waiver ............................................. 55 Section 6.5 Undertaking For Costs .................................................... 55 Section 6.6 Waiver of Stay or Extension Laws ......................................... 56 ARTICLE VII. THE AGENT ...................................................................... 56 Section 7.1 Certain Duties, Rights and Immunities .................................... 56 Section 7.2 Notice of Default ........................................................ 58 Section 7.3 Certain Rights of Agent .................................................. 58 Section 7.4 Not Responsible For Recitals, Etc. ....................................... 59 Section 7.5 May Hold Equity Units and Stripped Units and Other Dealings .............. 60 Section 7.6 Money Held In Custody .................................................... 60 Section 7.7 Compensation and Reimbursement ........................................... 60 Section 7.8 Corporate Agent Required; Eligibility .................................... 61 Section 7.9 Resignation and Removal; Appointment of Successor ........................ 61 Section 7.10 Acceptance of Appointment By Successor ................................... 62 Section 7.11 Merger, Conversion, Consolidation or Succession to Business .............. 63 Section 7.12 Preservation of Information; Communications to Holders ................... 63 Section 7.13 Failure to Act ........................................................... 63 Section 7.14 No Obligations of Agent .................................................. 64 Section 7.15 Tax Compliance ........................................................... 64 ARTICLE VIII. SUPPLEMENTAL AGREEMENTS ....................................................... 65 Section 8.1 Supplemental Agreements Without Consent of Holders ....................... 65 Section 8.2 Supplemental Agreements With Consent of Holders .......................... 65
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Page ---- Section 8.3 Execution of Supplemental Agreements.....................................67 Section 8.4 Effect of Supplemental Agreements........................................67 Section 8.5 Reference to Supplemental Agreements.....................................67 ARTICLE IX. CONSOLIDATION, MERGER, SALE OR CONVEYANCE..........................................67 Section 9.1 Company May Consolidate, Etc., Only on Certain Terms.....................67 Section 9.2 Successor Substituted....................................................68 ARTICLE X. COVENANTS...........................................................................68 Section 10.1 Performance Under Forward Purchase Contracts.............................68 Section 10.2 Maintenance of Office or Agency..........................................68 Section 10.3 Company to Reserve Common Stock..........................................69 Section 10.4 Covenants as to Common Stock.............................................69 Section 10.5 Statements of Officer of the Company as to Default.......................69 Section 10.6 ERISA....................................................................70
EXHIBITS Exhibit A Form of Equity Units Certificate Exhibit B Form of Stripped Units Certificate Exhibit C Instruction from Forward Purchase Contract Agent to Collateral Agent Exhibit D Instruction to Forward Purchase Contract Agent Exhibit E Notice to Settle by Cash iii FORWARD PURCHASE CONTRACT AGREEMENT, dated as of June 11, 2002, between American Electric Power Company, Inc., a New York corporation (the "Company"), and The Bank of New York, a New York banking corporation, acting as Forward Purchase Contract Agent for the Holders of Equity Units and Stripped Units from time to time (the "Agent"). RECITALS The Company has duly authorized the execution and delivery of this Agreement and the Certificates evidencing the Equity Units and Stripped Units. All things necessary to make the Forward Purchase Contracts, when the Certificates are executed by the Company and authenticated, executed on behalf of the Holders and delivered by the Agent, as provided in this Agreement, the valid obligations of the Company, and to constitute this Agreement a valid agreement of the Company, in accordance with its terms, have been done. For and in consideration of the premises and the purchase of the Equity Units by the Holders thereof, the Company and the Agent mutually agree as follows: ARTICLE I. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION Section 1.1 Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular, and nouns and pronouns of the masculine gender include the feminine and neuter genders; (b) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States; (c) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision; and (d) the following terms have the meanings given to them in this Section 1.1(d): "Act" when used with respect to any Holder, has the meaning specified in Section 1.4. "Affiliate" has the same meaning as given to that term in Rule 405 under the Securities Act or any successor rule thereunder. "Agent" means the Person named as the "Agent" in the first paragraph of this instrument until a successor Agent shall have become such pursuant to the applicable provisions of this Agreement, and thereafter "Agent" shall mean such Person. "Agent-purchased Treasury Consideration" has the meaning specified in Section 5.4(d). "Agreement" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more agreements supplemental hereto entered into pursuant to the applicable provisions hereof. "Applicable Market Value" has the meaning specified in Section 5.1(c). "Applicable Ownership Interest" means, with respect to an Equity Unit and the U.S. Treasury Securities in the Treasury Portfolio, (A) for the principal amount of a Note, a 1/20, or 5.0%, undivided beneficial ownership interest in a $1,000 principal or interest amount of a principal or interest strip in a U.S. Treasury security included in such Treasury Portfolio which matures on or prior to the Stock Purchase Date and (B) for the scheduled interest Payment Date on the Notes that occurs on the Stock Purchase Date, in the case of a successful remarketing, or for each scheduled interest Payment Date on the Notes that occurs after the Tax Event Redemption Date and on or before the Stock Purchase Date, in the case of a Tax Event Redemption, a 0.071875% undivided beneficial ownership interest in a $1,000 principal or interest amount of a principal or interest strip in a U.S. Treasury security included in the Treasury Portfolio that matures on or prior to that interest Payment Date or Dates. "Applicants" has the meaning specified in Section 7.12(b). "Bankruptcy Code" means Title 11 of the United States Code, or any other law of the United States that from time to time provides a uniform system of bankruptcy laws. "Beneficial Owner" means, with respect to a Book-Entry Interest, a Person who is the beneficial owner of such Book-Entry Interest as reflected on the books of the Clearing Agency or on the books of a Person maintaining an account with such Clearing Agency (directly as a Clearing Agency Participant or as an indirect participant, in each case in accordance with the rules of such Clearing Agency). "Board of Directors" means either the Board of Directors of the Company or any other committee of such Board duly authorized to act generally or in any particular respect for such Board hereunder. "Board Resolution" means (i) a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification or (ii) a copy of a unanimous written consent of the Board of Directors. "Book-Entry Interest" means a beneficial interest in a Global Certificate, ownership and transfers of which shall be maintained and made through book entries by a Clearing Agency as described in Section 3.6. "Business Day" means any day other than a Saturday, Sunday or any other day on which banking institutions and trust companies in the State of New York or at a place of payment are authorized or required by law, regulation or executive order to be closed. 2 "Capital Stock" means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated, whether voting or non-voting) corporate stock or similar interests in other types of entities. "Cash Merger" has the meaning specified in Section 5.10(a). "Cash Settlement" has the meaning specified in Section 5.4(a). "Certificate" means an Equity Units Certificate or a Stripped Units Certificate. "Clearing Agency" means an organization registered as a "Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as a depositary for the Equity Units and Stripped Units and in whose name, or in the name of a nominee of that organization, shall be registered a Global Certificate and which shall undertake to effect book-entry transfers and pledges of the Equity Units and Stripped Units. "Clearing Agency Participant" means a broker, dealer, bank, other financial institution or other Person for whom from time to time the Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency. "Closing Price" has the meaning specified in Section 5.1(c). "Code" means Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder. "Collateral" has the meaning specified in Section 2.1(a) of the Pledge Agreement. "Collateral Agent" means The Bank of New York, as Collateral Agent under the Pledge Agreement until a successor Collateral Agent shall have become such pursuant to the applicable provisions of the Pledge Agreement, and thereafter "Collateral Agent" shall mean the Person who is then the Collateral Agent thereunder. "Collateral Substitution" has the meaning specified in Section 3.13(a). "Common Stock" means the common stock, par value $6.50 per share, of the Company. "Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor shall have become such pursuant to the applicable provisions of this Agreement, and thereafter "Company" shall mean such successor. "Constituent Person" has the meaning specified in Section 5.6(b). "Contract Adjustment Payments" means, in the case of Equity Units and Stripped Units, the amount payable by the Company in respect of each Forward Purchase Contract constituting a part of such Equity Units or Stripped Units, equal to 3.50% per year of the Stated Amount, in each case computed (1) for any full quarterly period on the basis of a 360-day year of twelve 30-day months, and (2) for any period shorter than a full quarterly period, on the basis of a 30-day month 3 and (3) for periods of less than a month, on the basis of the actual number of days elapsed per 30-day month, plus any Deferred Contract Adjustment Payments accrued pursuant to Section 5.3. "Corporate Trust Office" means the office of the Agent at which, at any particular time, its corporate trust business shall be principally administered, which office at the date hereof is located at The Bank of New York, 101 Barclay Street, New York, New York 10286. "Coupon Rate" means the percentage rate per annum at which each Note will bear interest initially. "Current Market Price" has the meaning specified in Section 5.6(a)(8). "Custodial Agent" means The Bank of New York, as Custodial Agent under the Pledge Agreement until a successor Custodial Agent shall have become such pursuant to the applicable provisions of the Pledge Agreement, and thereafter "Custodial Agent" shall mean the Person who is then the Custodial Agent thereunder. "Deferred Contract Adjustment Payments" has the meaning specified in Section 5.3. "Depositary" means, initially, DTC, until another Clearing Agency becomes its successor, and thereafter "Depositary" shall mean such successor. "DTC" means The Depository Trust Company, the initial Clearing Agency. "Early Settlement" has the meaning specified in Section 5.9(a). "Early Settlement Amount" has the meaning specified in Section 5.9(a). "Early Settlement Date" has the meaning specified in Section 5.9(a). "Early Settlement Rate" has the meaning specified in Section 5.9(b). "Equity Units" means the collective rights and obligations of a Holder of an Equity Units Certificate in respect of a Note or the appropriate Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio, as the case may be, subject in each case to the Pledge thereof, and the related Forward Purchase Contract. "Equity Units Certificate" means a certificate evidencing the rights and obligations of a Holder in respect of the number of Equity Units specified on such certificate, substantially in the form of Exhibit A hereto. "Equity Units Register" and "Equity Units Registrar" have the respective meanings specified in Section 3.5(a). "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. "Exchange Act" means the Securities Exchange Act of 1934 and any statute successor thereto, in each case as amended from time to time, and the rules and regulations promulgated thereunder. 4 "Expiration Date" has the meaning specified in Section 1.4(f). "Expiration Time" has the meaning specified in Section 5.6(a)(6). "Failed Remarketing" has the meaning specified in Section 5.4(e). "Fair Market Value" with respect to securities distributed in a Spin-Off means (a) in the case of any Spin-Off that is effected simultaneously with an Initial Public Offering of such securities, the Initial Public Offering price of those securities, and (b) in the case of any other Spin-Off, the average of the Sale Prices of those securities over the first 10 Trading Days after the effective date of such Spin-Off. "Forward Purchase Contract," when used with respect to any Equity Units or Stripped Units, means the contract forming a part of such Equity Unit or Stripped Unit and obligating the Company to sell and the Holder of such Equity Unit or Stripped Unit to purchase Common Stock on the terms and subject to the conditions set forth in Article Five. "Forward Purchase Contract Settlement Fund" has the meaning specified in Section 5.5. "Global Certificate" means a Certificate that evidences all or part of the Units and is registered in the name of a Depositary or a nominee thereof. "Holder" means the Person in whose name the Units evidenced by an Equity Units Certificate or a Stripped Units Certificate is registered in the Equity Units Register or the Stripped Units Register, as the case may be. "Indenture" means the Indenture, dated as of May 1, 2001, between the Company and the Trustee as supplemented by any officers' certificate or supplemental indenture. "Initial Public Offering," with respect to any Spin-Off, means the first time securities of the same class or type as the securities being distributed in the Spin-Off are bone fide offered to the public for cash. "Issuer Order" or "Issuer Request" means a written order or request signed in the name of the Company by the Chief Executive Officer, the Chief Financial Officer, the President, any Vice-President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary (or other officer performing similar functions) of the Company and delivered to the Agent. "Last Failed Remarketing" has the meaning specified in Section 5.4(e)(i). "Merger Early Settlement" has the meaning specified in Section 5.10. "Merger Early Settlement Amount" has the meaning specified in Section 5.10. "Merger Early Settlement Date" has the meaning specified in Section 5.10. "Non-electing Share" has the meaning specified in Section 5.6(b). 5 "Notes" means the series of senior debt securities of the Company designated the 5.75% Senior Notes Due August 16, 2007, to be issued under the Indenture. "NYSE" has the meaning specified in Section 5.1(c). "Office of the Agent in The City of New York" means an office where Certificates may be presented or surrendered for acquisition of shares of Common Stock, transfer or exchange, Notes may be presented for payment or surrendered for transfer or exchange, and where notices and demands to or upon the Company in respect of Units may be served, such office being located initially at 101 Barclay Street, New York, New York 10286. "Officer's Certificate" means a certificate signed by the Chief Executive Officer, the Chief Financial Officer, the President, any Vice-President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary (or other officer performing similar functions) of the Company and delivered to the Agent. "Opinion of Counsel" means an opinion in writing signed by legal counsel, who may be an employee of or counsel to the Company or an Affiliate of the Company. "Opt-out Treasury Consideration" has the meaning specified in Section 5.4(g). "Outstanding Units" means, as of the date of determination, all Equity Units or Stripped Units evidenced by Certificates theretofore authenticated, executed and delivered under this Agreement, except: (i) If a Termination Event has occurred, (A) Stripped Units and (B) Equity Units for which the related Note or the appropriate Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio, as the case may be, has been theretofore deposited with the Agent in trust for the Holders of such Equity Units; (ii) Equity Units and Stripped Units evidenced by Certificates theretofore cancelled by the Agent or delivered to the Agent for cancellation or deemed cancelled pursuant to the provisions of this Agreement; and (iii) Equity Units and Stripped Units evidenced by Certificates in exchange for or in lieu of which other Certificates have been authenticated, executed on behalf of the Holder and delivered pursuant to this Agreement, other than any such Certificate in respect of which there shall have been presented to the Agent proof satisfactory to it that such Certificate is held by a bona fide purchaser in whose hands the Equity Units or Stripped Units evidenced by such Certificate are valid obligations of the Company; provided, that in determining whether the Holders of the requisite number of the Equity Units or Stripped Units have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Equity Units or Stripped Units owned by the Company or any Affiliate of the Company shall be disregarded and deemed not to be outstanding, except that, in determining whether the Agent shall be protected in relying upon any such request, demand, authorization, direction, 6 notice, consent or waiver, only Equity Units or Stripped Units which a Responsible Officer of the Agent actually knows to be so owned shall be so disregarded. Equity Units or Stripped Units so owned which have been pledged in good faith may be regarded as Outstanding Units if the pledgee establishes to the satisfaction of the Agent the pledgee's right so to act with respect to such Equity Units or Stripped Units and that the pledgee is not the Company or any Affiliate of the Company. "Payment Date" means each February 16, May 16, August 16 and November 16, commencing August 16, 2002. "Person" means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "Plan" means an employee benefit plan that is subject to Title I of ERISA, a plan, individual retirement account or other arrangement that is subject to Section 4975 of the Code or any similar law or any entity whose underlying assets are considered to include "plan assets" of any such plan, account or arrangement. "Pledge" means the pledge under the Pledge Agreement of the Notes, the Treasury Securities or the appropriate Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio, in each case constituting a part of the Equity Units or Stripped Units, property, cash, securities, financial assets and security entitlements of the Collateral Account (as defined in Section 1.1 of the Pledge Agreement) and any proceeds of any of the foregoing. "Pledge Agreement" means the Pledge Agreement, dated as of the date hereof, by and among the Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary and the Agent, on its own behalf and as attorney-in-fact for the Holders from time to time of the Equity Units and Stripped Units. "Pledged Applicable Ownership Interest in the Treasury Portfolio" has the meaning specified in Section 2.1(c) of the Pledge Agreement. "Pledged Notes" has the meaning specified in Section 2.1(c) of the Pledge Agreement. "Pledged Treasury Consideration" has the meaning specified in Section 2.1(c) of the Pledge Agreement. "Pledged Treasury Securities" has the meaning specified in Section 2.1(c) of the Pledge Agreement. "Predecessor Certificate" means a Predecessor Equity Units Certificate or a Predecessor Stripped Units Certificate. "Predecessor Equity Units Certificate" of any particular Equity Units Certificate means every previous Equity Units Certificate evidencing all or a portion of the rights and obligations of the Company and the Holder under the Equity Units evidenced thereby; and, for the purposes of this definition, any Equity Units Certificate authenticated and delivered under Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Equity Units Certificate shall be 7 deemed to evidence the same rights and obligations of the Company and the Holder as the mutilated, destroyed, lost or stolen Equity Units Certificate. "Predecessor Stripped Units Certificate" of any particular Stripped Units Certificate means every previous Stripped Units Certificate evidencing all or a portion of the rights and obligations of the Company and the Holder under the Stripped Units evidenced thereby; and, for the purposes of this definition, any Stripped Units Certificate authenticated and delivered under Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Stripped Units Certificate shall be deemed to evidence the same rights and obligations of the Company and the Holder as the mutilated, destroyed, lost or stolen Stripped Units Certificate. "Purchase Price" has the meaning specified in Section 5.1(a). "Purchased Shares" has the meaning specified in Section 5.6(a)(6). "Quotation Agent" means J.P. Morgan Securities Inc. or its successor or any other primary U.S. government securities dealer in New York City selected by the Company. "Record Date" for the distribution payable on any Payment Date means, as to any Global Certificate, the Business Day next preceding such Payment Date, and as to any other Certificate, the 15th day preceding such Payment Date. "Redemption Amount" means, (A) in the case of a Tax Event Redemption occurring prior to the earlier of a successful remarketing of the Notes or the Stock Purchase Date, for each Note the product of (i) the Stated Amount of such Note and (ii) a fraction whose numerator is the applicable Treasury Portfolio Purchase Price and whose denominator is the aggregate principal amount of Notes outstanding on the Tax Event Redemption Date, and (B) in the case of a Tax Event Redemption occurring after the earlier of a successful remarketing of the Notes or the Stock Purchase Date, for each Note the Stated Amount of the Note. "Redemption Price" means the redemption price per Note equal to the Redemption Amount. "Register" means the Equity Units Register and the Stripped Units Register, as applicable. "Registrar" means the Equity Units Registrar and the Stripped Units Registrar, as applicable. "Remarketing Agent" means Salomon Smith Barney Inc. or its successor under the Remarketing Agreement. "Remarketing Agreement" means the Remarketing Agreement dated June 11, 2002 by and among the Company, the Remarketing Agent and the Agent. "Remarketing Date" means the third Business Day preceding May 16, 2005. "Remarketing Fee" has the meaning specified in Section 5.4(d). 8 "Remarketing Period" means the three Business Day period either: (i) beginning on the Remarketing Date and ending after the two immediately following Business Days; (ii) immediately preceding June 16, 2005; (iii) immediately preceding July 16, 2005; or (iv) immediately preceding August 12, 2005. "Remarketing Value" means (1) the value at the Remarketing Date or any Subsequent Remarketing Date, as the case may be, of either (a) U.S. Treasury securities that will pay, on or prior to the Payment Date falling on the Stock Purchase Date, an amount of cash equal to the aggregate interest payment that is scheduled to be payable on that Payment Date, on (x) the Notes which are included in Equity Units and are participating in the remarketing and (y) the Separate Notes which are to be remarketed pursuant to Section 4.5(d) of the Pledge Agreement and Section 1.6 of the Supplemental Indenture, assuming for that purpose that the interest rate on the Notes is equal to the Coupon Rate, if the remarketing occurs prior to the fourth Business Day preceding the Stock Purchase Date, or (b) an amount of cash equal to the aggregate interest payment that is scheduled to be payable on that Payment Date, on (x) the Notes which are included in Equity Units and are participating in the remarketing and (y) the Separate Notes which are to be remarketed pursuant to Section 4.5(d) of the Pledge Agreement, assuming for that purpose that the interest rate on the Notes is equal to the Coupon Rate, if the remarketing occurs on or after the fourth Business Day preceding the Stock Purchase Date; and (2) the value at the Remarketing Date or any Subsequent Remarketing Date, as the case may be, of either (a) U.S. Treasury securities that will pay, on or prior to the Stock Purchase Date, an amount of cash equal to the Stated Amount of (x) such Notes which are included in Equity Units and are participating in the remarketing and (y) the Separate Notes which are to be remarketed pursuant to Section 4.5(d) of the Pledge Agreement and Section 1.6 of the Supplemental Indenture, if the remarketing occurs prior to the fourth Business Day preceding the Stock Purchase Date, or (b) an amount of cash equal to the Stated Amount of (x) such Notes which are included in Equity Units and are participating in the remarketing and (y) the Separate Notes which are to be remarketed pursuant to Section 4.5(d) of the Pledge Agreement, if the remarketing occurs on or after the fourth Business Day preceding the Stock Purchase Date provided that for purposes of clauses (1) and (2) above, the Remarketing Value shall be calculated on the assumptions that (x) the U.S. Treasury securities are highly liquid and mature on or within 35 days prior to the Stock Purchase Date, as determined in good faith by the Remarketing Agent in a manner intended to minimize the cash value of the U.S. Treasury securities, and (y) the U.S. Treasury securities are valued based on the ask-side price of the U.S. Treasury securities at a time between 9:00 a.m. and 11:00 a.m., New York City time, selected by the 9 Remarketing Agent, on the Remarketing Date or any Subsequent Remarketing Date, as the case may be, as determined on a third-day settlement basis by reasonable and customary means selected in good faith by the Remarketing Agent, plus accrued interest to that date. "Reorganization Event" has the meaning specified in Section 5.6(b). "Reset Rate" has the meaning specified in Section 5.4(c). "Responsible Officer" means, when used with respect to the Agent, any officer within the corporate trust department of the Agent (or any successor of the Agent), including any Vice-President, any assistant Vice-President, any assistant secretary, any assistant treasurer, any trust officer, any senior trust officer or any other officer of the Agent who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such Person's knowledge of and familiarity with the particular subject and who, in each of the above cases, shall have direct responsibility for the administration of this Agreement. "Sale Price" of the Common Stock or any securities distributed in a Spin-Off, as the case may be, on any Trading Day means the closing sale price per share (or if no closing sale price is reported, the average of the bid and asked prices or, if more than one in either case, the average of the average bid and the average asked prices) on such Trading Day as reported in composite transactions for the principal U.S. securities exchange on which the Common Stock or such securities are traded or, if the Common Stock or such securities are not listed on a U.S. national or regional securities exchange, as reported by NASDAQ. "Securities Act" means the Securities Act of 1933, and any statute successor thereto, in each case as amended from time to time, and the rules and regulations promulgated thereunder. "Securities Intermediary" means The Bank of New York, in its capacity as securities intermediary under the Pledge Agreement, together with its successors in such capacity. "Separate Notes" has the meaning specified in Section 1.1 of the Pledge Agreement. "Settlement Date" means any Early Settlement Date or Merger Early Settlement Date or the Stock Purchase Date. "Settlement Rate" has the meaning specified in Section 5.1(a). "Spin-Off" means a dividend or other distribution of shares of Capital Stock of any class or series, or similar equity interests, of or relating to a subsidiary or other business unit of the Company. "Stated Amount" means, with respect to any one Note, Equity Unit or Stripped Unit, $50. "Stock Purchase Date" means August 16, 2005. 10 "Stripped Units" means the collective rights and obligations of a holder of a Stripped Units Certificate in respect of a 1/20 undivided beneficial interest in a Treasury Security, subject in each case to the Pledge thereof, and the related Forward Purchase Contract. "Stripped Units Certificate" means a certificate evidencing the rights and obligations of a Holder in respect of the number of Stripped Units specified on such certificate, substantially in the form of Exhibit B hereto. "Stripped Units Register" and "Stripped Units Registrar" have the respective meanings specified in Section 3.5(a). "Subsequent Remarketing Date" means, provided there has been one or more Failed Remarketings, the date on which the Remarketing Agent has consummated a remarketing in accordance with Section 5.4 hereof and Section 1.6 of the Indenture, such date to be no later than the third Business Day immediately preceding the Stock Purchase Date. "Supplemental Indenture" means a supplemental indenture dated as of June 11, 2002, between the Company and the Trustee to the indenture dated as of May 1, 2001, between the Company and the Trustee. "Tax Event" means the receipt by the Company of an opinion of nationally recognized independent tax counsel experienced in such matters, which may be Simpson Thacher & Bartlett, to the effect that there is more than an insubstantial risk that interest payable by the Company on the Notes would not be deductible, in whole or in part, by the Company for United States federal income tax purposes, as a result of (a) any amendment to, or change (including any announced proposed change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein affecting taxation, (b) any amendment to or change in an official interpretation or application of such laws or regulations by any legislative body, court, governmental agency or regulatory authority or (c) any interpretation or pronouncement that provides for a position with respect to such laws or regulations that differs from the generally accepted position on June 11, 2002, which amendment, change or proposed change is effective or which interpretation or pronouncement is announced on or after June 11, 2002. "Tax Event Redemption" means, if a Tax Event shall occur, the redemption of the Notes, at the option of the Company, in whole but not in part, on not less than 30 days' nor more than 60 days' written notice. "Tax Event Redemption Date" means the date upon which a Tax Event Redemption is to occur. "Termination Date" means the date, if any, on which a Termination Event occurs. "Termination Event" means the occurrence of any of the following events, at any time on or prior to the Stock Purchase Date: (i) the entry by a court having competent jurisdiction of: 11 (a) a decree or order for relief in respect of the Company in an involuntary proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law or a decree or order adjudging the Company to be insolvent, or approving a petition seeking reorganization, arrangement, adjustment or composition of the Company and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (b) a final and non-appealable order appointing a custodian, receiver, liquidator, assignee, trustee or other similar official of the Company or of any substantial part of the property of the Company ordering the winding up or liquidation of the affairs of the Company; or (ii) the commencement by the Company of a voluntary proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law or of a voluntary proceeding seeking to be adjudicated insolvent or the consent by the Company to the entry of a decree or order for relief in an involuntary proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law or to the commencement of any insolvency proceedings against it, or the filling by the Company of a petition or answer or consent seeking organization or relief under any applicable law, or the consent by the Company to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee or similar official of the or any substantial part of the property of the Company or the making by the Company of an assignment for the benefit of creditors, or the taking of corporate action by the Company or any in furtherance of any such action. "Threshold Appreciation Price" has the meaning specified in Section 5.1(a)(i). "TIA" means the Trust Indenture Act of 1939, and any statute successor thereto, in each case as amended from time to time, and the rules and regulations promulgated thereunder. "Trading Day" has the meaning specified in Section 5.1(c). "Transaction Documents" has the meaning specified in Section 7.1(a). "Treasury Consideration" means the Agent-purchased Treasury Consideration or the Opt-out Treasury Consideration. "Treasury Portfolio" means: (i) if a Tax Event Redemption occurs prior to a successful remarketing of the Notes or the Stock Purchase Date, a portfolio of zero-coupon U.S. Treasury Securities consisting of principal or interest strips of U.S. Treasury Securities that mature on or prior to the Stock Purchase Date in an aggregate amount equal to the aggregate principal amount of the Notes included in the Equity Units on the Tax Event Redemption Date and, with respect to each scheduled interest Payment Date on the Notes that occurs after the Tax Event Redemption Date and on or before the Stock Purchase Date, interest or principal strips of U.S. Treasury Securities that mature on or prior to such Payment Date in an aggregate amount equal to the aggregate interest payment that would be due on the aggregate principal amount of the Notes 12 included in the Equity Units on such Payment Date if the interest rate of the Notes were not reset on the applicable Remarketing Date, and (ii) solely for purposes of determining the Treasury Portfolio Purchase Price in the case of a Tax Event Redemption Date occurring prior to a successful remarketing of the Notes, a portfolio of zero-coupon U.S. Treasury Securities consisting of principal or interest strips of U.S. Treasury Securities that mature on or prior to the Stock Purchase Date in an aggregate amount equal to the aggregate principal amount of the Notes outstanding on the Tax Event Redemption Date and with respect to each scheduled interest Payment Date on the Notes outstanding that occurs after the Tax Event Redemption Date and on or before the Stock Purchase Date, interest or principal strips of U.S. Treasury Securities that mature on or prior to such interest Payment Date in an aggregate amount equal to the aggregate interest payment that would be due on the aggregate principal amount of the Notes outstanding on the Tax Event Redemption Date. "Treasury Portfolio Purchase Price" means the lowest aggregate price quoted by a primary U.S. government securities dealer in New York City to the Quotation Agent on the third Business Day immediately preceding the Tax Event Redemption Date for the purchase of the Treasury Portfolio for settlement on the Tax Event Redemption Date. "Treasury Security" means a zero-coupon U.S. Treasury security (CUSIP Number 912803AG8) maturing on August 15, 2005 that will pay $1,000 on such maturity date. "Trustee" means The Bank of New York, a New York banking corporation, as trustee under the Indenture, or any successor thereto. "Underwriting Agreement" means the Underwriting Agreement relating to the Equity Units dated June 5, 2002 between the Company and the underwriters named therein. "Vice-President" means any vice-president, whether or not designated by a number or a word or words added before or after the title "vice-president." Section 1.2 Compliance Certificates and Opinions. Except as otherwise expressly provided by this Agreement, upon any application or request by the Company to the Agent to take any action under any provision of this Agreement, the Company shall furnish to the Agent an Officer's Certificate stating that all conditions precedent, if any, provided for in this Agreement relating to the proposed action have been complied with and, if requested by the Agent, an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Agreement relating to such particular application or request, no additional certificate or opinion need be furnished. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Agreement (other than the Officer's Certificate provided for in Section 10.5) shall include: (a) a statement that the individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; 13 (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of such individual, he or she has made such examination or investigation as is necessary to enable such individual to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of such individual, such condition or covenant has been complied with. Section 1.3 Form of Documents Delivered to Agent. (a) In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. (b) Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Agreement, they may, but need not, be consolidated and form one instrument. Section 1.4 Acts of Holders; Record Dates. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Agreement to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent of such Holders duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Agent and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Agreement and 14 (subject to Section 7.1) conclusive in favor of the Agent and the Company, if made in the manner provided in this Section. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved in any manner which the Agent deems sufficient. (c) The ownership of Equity Units or Stripped Units shall be proved by the Equity Units Register or the Stripped Units Register, as the case may be. (d) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Certificate shall bind every future Holder of the same Certificate and the Holder of every Certificate issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Agent or the Company in reliance thereon, whether or not notation of such action is made upon such Certificate. (e) The Company may set any day as a record date for the purpose of determining the Holders of Outstanding Units entitled to give, make or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Agreement to be given, made or taken by Holders of Equity Units and Stripped Units. If any record date is set pursuant to this paragraph, the Holders of the Outstanding Units on such record date, and no other Holders, shall be entitled to take the relevant action with respect to the Equity Units or the Stripped Units, as the case may be, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite number of Outstanding Units on such record date. Nothing in this paragraph shall be construed to prevent the Company from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite number of Outstanding Units on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Agent in writing and to each Holder of Equity Units and Stripped Units in the manner set forth in Section 1.6. (f) With respect to any record date set pursuant to this Section, the Company may designate any date as the "Expiration Date" and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the Agent in writing, and to each Holder of Equity Units and Stripped Units in the manner set forth in Section 1.6, on or prior to the existing Expiration Date. If an Expiration Date is not designated with respect to any record date set pursuant to this Section, the Company shall be deemed to have initially designated the 180th day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as provided in this paragraph. 15 Notwithstanding the foregoing, no Expiration Date shall be later than the 180th day after the applicable record date. Section 1.5 Notices. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Agreement to be made upon, given or furnished to, or filed with: (a) the Agent by any Holder or by the Company shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing and personally delivered, mailed, first-class postage prepaid, telecopied or delivered by overnight air courier guaranteeing next day delivery, to the Agent at 101 Barclay Street, New York, New York 10286, telecopy number: (212) 328-8243, Attention: Corporate Trust Department, or at any other address furnished in writing by the Agent to the Holders and the Company; or (b) the Company by the Agent or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing and personally delivered, mailed, first-class postage prepaid, telecopied or delivered by overnight air courier guaranteeing next day delivery, to the Company at American Electric Power Company, Inc., 1 Riverside Plaza, Columbus, Ohio 43215, telecopy number: (614) 223-1687, Attention: General Counsel, or at any other address furnished in writing to the Agent and the Holders by the Company; or (c) the Collateral Agent by the Agent, the Company or any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing and personally delivered, mailed, first-class postage prepaid, telecopied or delivered by overnight air courier guaranteeing next day delivery, addressed to the Collateral Agent at 101 Barclay Street, New York, New York 10286, telecopy number: (212) 328-8243, Attention: Corporate Trust Department, or at any other address furnished in writing by the Collateral Agent to the Agent, the Company and the Holders; or (d) the Trustee by the Company shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing and personally delivered, mailed, first-class postage prepaid, telecopied or delivered by overnight air courier guaranteeing next day delivery, addressed to the Trustee at The Bank of New York, 101 Barclay Street, New York, New York 10286, telecopy number: (212) 328-8243, Attention: Corporate Trust Department, or at any other address furnished in writing by the Trustee to the Company. Section 1.6 Notice to Holders; Waiver. (a) Where this Agreement provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at its address as it appears in the applicable Register, not later than the latest date, and not earlier than the 16 earliest date, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice nor any defect in any notice so mailed to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Agreement provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Agent, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. (b) In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Agent shall constitute a sufficient notification for every purpose hereunder. Section 1.7 Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. Section 1.8 Successors and Assigns. All covenants and agreements in this Agreement by the Company shall bind its successors and assigns, whether so expressed or not. Section 1.9 Separability Clause. In case any provision in this Agreement or in the Equity Units or Stripped Units shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof and thereof shall not in any way be affected or impaired thereby. Section 1.10 Benefits of Agreement. Nothing in this Agreement or in the Equity Units or Stripped Units, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and, to the extent provided hereby, the Holders, any benefits or any legal or equitable right, remedy or claim under this Agreement. The Holders from time to time shall be beneficiaries of this Agreement and shall be bound by all of the terms and conditions hereof and of the Equity Units and Stripped Units evidenced by their Certificates by their acceptance of delivery of such Certificates. Section 1.11 Governing Law. This Agreement and the Equity Units and Stripped Units shall be governed by and construed in accordance with the laws of the State of New York, without regard to its principles of conflicts of laws. Section 1.12 Legal Holidays. 17 (a) In any case where any Payment Date shall not be a Business Day, then (notwithstanding any other provision of this Agreement or the Equity Units Certificates) payments on the Notes shall not be made on such date, but such payments shall be made on the next succeeding Business Day with the same force and effect as if made on such Payment Date, provided that no interest shall accrue or be payable by the Company for the period from and after any such Payment Date, except that if such next succeeding Business Day is in the next succeeding calendar year, such payment shall be made on the Business Day immediately preceding the Payment Date with the same force and effect as if made on such Payment Date. (b) If any date on which Contract Adjustment Payments are to be made on the Forward Purchase Contracts is not a Business Day, then payment of the Contract Adjustment Payments payable on that date will be made on the next succeeding day which is a Business Day, and no interest or additional payment will be paid in respect of the delay. However, if that Business Day is in the next succeeding calendar year, the payment will be made on the Business Day immediately preceding the Payment Date with the same force and effect as if made on that Payment Date. (c) In any case where the Stock Purchase Date shall not be a Business Day, then (notwithstanding any other provision of this Agreement or the Certificates), the Forward Purchase Contracts shall not be performed on such date, but the Forward Purchase Contracts shall be performed on the immediately following Business Day with the same force and effect as if performed on the Stock Purchase Date. Section 1.13 Counterparts. This Agreement may be executed in any number of counterparts by the parties hereto, each of which, when so executed and delivered, shall be deemed an original, but all such counterparts shall together constitute one and the same instrument. Section 1.14 Inspection of Agreement. A copy of this Agreement shall be available at all reasonable times during normal business hours at the Corporate Trust Office for inspection by any Holder. ARTICLE II. CERTIFICATE FORMS Section 2.1 Forms of Certificates Generally. (a) The Equity Units Certificates (including the form of Forward Purchase Contract forming part of the Equity Units evidenced thereby) shall be in substantially the form set forth in Exhibit A hereto, with such letters, numbers or other marks of identification or designation and such legends or endorsements printed thereon, as may be required by the rules of any securities exchange or quotation system on which the Equity Units are listed or quoted for trading or any depositary therefor, or as may, consistently herewith, be determined by the officers of the Company executing such Equity Units Certificates, as evidenced by their execution of the Equity Units Certificates. 18 (b) The definitive Equity Units Certificates shall be printed or may be produced in any other manner, all as determined by the officers of the Company executing such Equity Units Certificates, consistent with the provisions of this Agreement, as evidenced by their execution thereof. (c) The Stripped Units Certificates (including the form of Forward Purchase Contracts forming part of the Stripped Units evidenced thereby) shall be in substantially the form set forth in Exhibit B hereto, with such letters, numbers or other marks of identification or designation and such legends or endorsements printed thereon as may be required by the rules of any securities exchange or quotation system on which the Stripped Units may be listed or quoted for trading or any depositary therefor, or as may, consistently herewith, be determined by the officers of the Company executing such Stripped Units Certificates, as evidenced by their execution of the Stripped Units Certificates. (d) The definitive Stripped Units Certificates shall be printed or may be produced in any other manner, all as determined by the officers of the Company executing such Stripped Units Certificates, consistent with the provisions of this Agreement, as evidenced by their execution thereof. (e) Every Global Certificate authenticated, executed on behalf of the Holders and delivered hereunder shall bear a legend in substantially the following form: "THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE FORWARD PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE FORWARD PURCHASE CONTRACT AGREEMENT. Unless this Certificate is presented by an authorized representative of The Depository Trust Company (55 Water Street, New York, New York) to the Company or its agent for registration of transfer, exchange or payment, and any Certificate issued is registered in the name of Cede & Co., or such other name as requested by an authorized representative of The Depository Trust Company, and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein." Section 2.2 Form of Agent's Certificate of Authentication. (a) The form of the Agent's certificate of authentication of the Equity Units shall be in substantially the form set forth on the form of the Equity Units Certificates. (b) The form of the Agent's certificate of authentication of the Stripped Units shall be in substantially the form set forth on the form of the Stripped Units Certificates. 19 ARTICLE III. THE EQUITY UNITS Section 3.1 Title and Terms; Denominations. (a) The aggregate number of Equity Units and Stripped Units, if any, evidenced by Certificates authenticated, executed on behalf of the Holders and delivered hereunder is limited to 6,000,000 (6,900,000 if the Underwriters' (as defined in the Underwriting Agreement) over-allotment option pursuant to the Underwriting Agreement is exercised in full), except for Certificates authenticated, executed and delivered upon registration of transfer of, in exchange for, or in lieu of other Certificates pursuant to Section 3.4, 3.5, 3.10, 3.13, 3.14, 5.9, 5.10 or 8.5. (b) The Certificates shall be issuable only in registered form and only in denominations of a single Equity Unit and any integral multiple thereof. Section 3.2 Rights and Obligations Evidenced by the Certificates. (a) Each Equity Units Certificate shall evidence the number of Equity Units specified therein, with each such Equity Units Certificate representing the ownership by the Holder thereof of a beneficial interest in a Note or the appropriate Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio, as the case may be, subject to the Pledge of such Note or such Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio, as the case may be, by such Holder pursuant to the Pledge Agreement, and the rights and obligations of the Holder thereof and the Company under one Forward Purchase Contract. The Agent as attorney-in-fact for, and on behalf of, the Holder of each Equity Unit shall pledge, pursuant to the Pledge Agreement, the Note or the appropriate Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio, as the case may be, forming a part of such Equity Units, to the Collateral Agent and grant to the Collateral Agent a security interest in the right, title, and interest of such Holder in such Note or such Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio, as the case may be, for the benefit of the Company, to secure the obligation of the Holder under each Forward Purchase Contract to purchase the Common Stock of the Company. Prior to the purchase of shares of Common Stock under each Forward Purchase Contract, such Forward Purchase Contracts shall not entitle the Holders of Equity Units Certificates to any of the rights of a holder of shares of Common Stock, including, without limitation, the right to vote or receive any dividends or other payments or to consent or to receive notice as stockholders in respect of the meetings of stockholders or for the election of directors of the Company or for any other matter, or any other rights whatsoever as stockholders of the Company. (b) Each Stripped Units Certificate shall evidence the number of Stripped Units specified therein, with each such Stripped Units Certificate representing the ownership by the Holder thereof of a 1/20 undivided beneficial interest in a Treasury Security, subject to the Pledge of such interest in such Treasury Security by such Holder pursuant to the Pledge Agreement, and the rights and obligations of the Holder thereof and the Company under one Forward Purchase Contract. The Agent as attorney-in-fact for, and on behalf of, the 20 Holder of each Stripped Unit shall pledge, pursuant to the Pledge Agreement, the Treasury Security, forming a part of such Stripped Unit, to the Collateral Agent and grant to the Collateral Agent a security interest in the right, title and interest of such Holder in such Treasury Security for the benefit of the Company, to secure the obligation of the Holder under each Forward Purchase Contract to purchase shares of Common Stock pursuant to this Agreement and the related Forward Purchase Contract. Prior to the purchase of shares of Common Stock under each Forward Purchase Contract, such Forward Purchase Contracts shall not entitle the Holders of Stripped Units Certificates to any of the rights of a holder of shares of Common Stock, including, without limitation, the right to vote or receive any dividends or other payments or to consent or to receive notice as stockholders in respect of the meetings of stockholders or for the election of directors of the Company or for any other matter, or any other rights whatsoever as stockholders of the Company. Section 3.3 Execution, Authentication, Delivery and Dating. (a) Subject to the provisions of Sections 3.13 and 3.14, upon the execution and delivery of this Agreement, and at any time and from time to time thereafter, the Company may deliver Certificates executed by the Company to the Agent for authentication, execution on behalf of the Holders and delivery, together with its Issuer Order for authentication of such Certificates, and the Agent in accordance with such Issuer Order shall authenticate, execute on behalf of the Holders and deliver such Certificates. (b) The Certificates shall be executed on behalf of the Company by the Chief Executive Officer, the Chief Financial Officer, the President, any Vice-President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary (or other officer performing similar functions) of the Company and delivered to the Agent. The signature of any of these officers on the Certificates may be manual or by facsimile. (c) Certificates bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Certificates or did not hold such offices at the date of such Certificates. (d) No Forward Purchase Contract evidenced by a Certificate shall be valid until such Certificate has been executed on behalf of the Holder by the manual signature of an authorized signatory of the Agent, as such Holder's attorney-in-fact. Such signature by an authorized signatory of the Agent shall be conclusive evidence that the Holder of such Certificate has entered into the Forward Purchase Contracts evidenced by such Certificate. (e) Each Certificate shall be dated the date of its authentication. (f) No Certificate shall be entitled to any benefit under this Agreement or be valid or obligatory for any purpose unless there appears on such Certificate a certificate of authentication substantially in the form provided for herein executed by an authorized signatory of the Agent by manual signature, and such certificate upon any Certificate shall 21 be conclusive evidence, and the only evidence, that such Certificate has been duly authenticated and delivered hereunder. Section 3.4 Temporary Certificates. (a) Pending the preparation of definitive Certificates, the Company shall execute and deliver to the Agent, and the Agent shall authenticate, execute on behalf of the Holders, and deliver, in lieu of such definitive Certificates, temporary Certificates which are in substantially the form set forth in Exhibit A or Exhibit B hereto, as the case may be, with such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as may be required by the rules of any securities exchange on which the Equity Units or Stripped Units, as the case may be, are listed, or as may, consistent herewith, be determined by the officers of the Company executing such Certificates, as evidenced by their execution of the Certificates. (b) If temporary Certificates are issued, the Company will cause definitive Certificates to be prepared without unreasonable delay. After the preparation of definitive Certificates, the temporary Certificates shall be exchangeable for definitive Certificates upon surrender of the temporary Certificates at the Corporate Trust Office, at the expense of the Company and without charge to the Holder. Upon surrender for cancellation of any one or more temporary Certificates, the Company shall execute and deliver to the Agent, and the Agent shall authenticate, execute on behalf of the Holder, and deliver in exchange therefor, one or more definitive Certificates of like tenor and denominations and evidencing a like number of Equity Units or Stripped Units, as the case may be, as the temporary Certificate or Certificates so surrendered. Until so exchanged, the temporary Certificates shall in all respects evidence the same benefits and the same obligations with respect to the Equity Units or Stripped Units, as the case may be, evidenced thereby as definitive Certificates. Section 3.5 Registration; Registration of Transfer and Exchange. (a) The Agent shall keep at the Corporate Trust Office a register (the "Equity Units Register") in which, subject to such reasonable regulations as it may prescribe, the Agent shall provide for the registration of Equity Units Certificates and of transfers of Equity Units Certificates (the Agent, in such capacity, the "Equity Units Registrar") and a register (the "Equity Units Register") in which, subject to such reasonable regulations as it may prescribe, the Agent shall provide for the registration of the Equity Units Certificates and transfers of Equity Units Certificates (the Agent, in such capacity, the "Equity Units Registrar"). (b) Upon surrender for registration of transfer of any Certificate at the Corporate Trust Office, the Company shall execute and deliver to the Agent, and the Agent shall authenticate, execute on behalf of the designated transferee or transferees, and deliver, in the name of the designated transferee or transferees, one or more new Certificates of like tenor and denominations, and evidencing a like number of Equity Units or Stripped Units, as the case may be. 22 (c) At the option of the Holder, Certificates may be exchanged for other Certificates, of like tenor and denominations and evidencing a like number of Equity Units or Stripped Units, as the case may be, upon surrender of the Certificates to be exchanged at the Corporate Trust Office. Whenever any Certificates are so surrendered for exchange, the Company shall execute and deliver to the Agent, and the Agent shall authenticate, execute on behalf of the Holder, and deliver the Certificates which the Holder making the exchange is entitled to receive. (d) All Certificates issued upon any registration of transfer or exchange of a Certificate shall evidence the ownership of the same number of Equity Units or Stripped Units, as the case may be, and be entitled to the same benefits and subject to the same obligations, under this Agreement as the Equity Units or Stripped Units, as the case may be, evidenced by the Certificate surrendered upon such registration of transfer or exchange. (e) Every Certificate presented or surrendered for registration of transfer or for exchange shall (if so required by the Agent) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Agent duly executed, by the Holder thereof or its attorney duly authorized in writing. (f) No service charge shall be made for any registration of transfer or exchange of a Certificate, but the Company and the Agent may require payment from the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Certificates, other than any exchanges pursuant to Sections 3.4, 3.6, 3.9 and 8.5 not involving any transfer. (g) Notwithstanding the foregoing, the Company shall not be obligated to execute and deliver to the Agent, and the Agent shall not be obligated to authenticate, execute on behalf of the Holder and deliver any Certificate presented or surrendered for registration of transfer or for exchange on or after the Business Day immediately preceding the earlier of the Stock Purchase Date or the Termination Date. In lieu of delivery of a new Certificate, upon satisfaction of the applicable conditions specified above in this Section and receipt of appropriate registration or transfer instructions from such Holder, the Agent shall, (i) if the Stock Purchase Date has occurred, deliver the shares of Common Stock issuable in respect of the Forward Purchase Contracts forming a part of the Equity Units or Stripped Units, as the case may be, evidenced by such Certificate, (ii) in the case of Equity Units, if a Termination Event shall have occurred prior to the Stock Purchase Date, transfer the Notes or the appropriate Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio, as applicable, relating to such Equity Units, or (iii) in the case of Stripped Units, if a Termination Event shall have occurred prior to the Stock Purchase Date, transfer the Treasury Securities relating to such Stripped Units, 23 in each case subject to the applicable conditions and in accordance with the applicable provisions of Article V. Section 3.6 Book-Entry Interests. The Certificates, on original issuance will be issued in the form of one or more fully registered Global Certificates, to be delivered to the Depositary or its custodian by, or on behalf of, the Company. Such Global Certificate shall initially be registered in the applicable Register in the name of Cede & Co., the nominee of the Depositary, and no Beneficial Owner will receive a definitive Certificate representing such Beneficial Owner's interest in such Global Certificate, except as provided in Section 3.9. The Agent shall enter into an agreement with the Depositary if so requested by the Company. Unless and until definitive, fully registered Certificates have been issued to Beneficial Owners pursuant to Section 3.9: (a) the provisions of this Section 3.6 shall be in full force and effect; (b) the Company shall be entitled to deal with the Clearing Agency for all purposes of this Agreement (including receiving approvals, votes or consents hereunder) as the Holder of the Equity Units and Stripped Units and the sole holder of the Global Certificate(s) and shall have no obligation to the Beneficial Owners; (c) to the extent that the provisions of this Section 3.6 conflict with any other provisions of this Agreement, the provisions of this Section 3.6 shall control; and (d) the rights of the Beneficial Owners shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such Beneficial Owners and the Clearing Agency and/or the Clearing Agency Participants. The Clearing Agency will make book-entry transfers among Clearing Agency Participants. Section 3.7 Notices To Holders. Whenever a notice or other communication to the Holders is required to be given under this Agreement, the Company or the Company's agent shall give such notices and communications to the Holders and, with respect to any Equity Units or Stripped Units registered in the name of a Clearing Agency or the nominee of a Clearing Agency, the Company or the Company's agent shall, except as set forth herein, have no obligations to the Beneficial Owners. Section 3.8 Appointment of Successor Clearing Agency. If any Clearing Agency elects to discontinue its services as securities depositary with respect to the Equity Units and Stripped Units or ceases to be eligible as a "clearing agency" under the Exchange Act, the Company may, in its sole discretion, appoint a successor Clearing Agency with respect to the Equity Units and Stripped Units. Section 3.9 Definitive Certificates. If 24 (i) a Clearing Agency elects to discontinue its services as securities depositary with respect to the Equity Units and Stripped Units or ceases to be eligible as a "clearing agency" under the Exchange Act and a successor Clearing Agency is not appointed within 90 days after such discontinuance pursuant to Section 3.8, (ii) the Company elects to terminate the book-entry system through the Clearing Agency with respect to the Equity Units and Stripped Units, or (iii) there shall have occurred and be continuing a default by the Company in respect of its obligations under one or more Forward Purchase Contracts, this Agreement, the Indenture, the Notes, the Equity Units, the Pledge Agreement or any other principal agreements or instruments executed in connection with the offering of Equity Units then upon surrender of the Global Certificates representing the Book-Entry Interests with respect to the Equity Units and Stripped Units by the Clearing Agency, accompanied by registration instructions, the Company shall cause definitive Certificates to be delivered to Clearing Agency Participants in accordance with the instructions of the Clearing Agency. The Company and the Agent shall not be liable for any delay in delivery of such instructions and may conclusively rely on and shall be protected in relying on such instructions. Section 3.10 Mutilated, Destroyed, Lost and Stolen Certificates. (a) If any mutilated Certificate is surrendered to the Agent, the Company shall execute and deliver to the Agent, and the Agent shall authenticate, execute on behalf of the Holder, and deliver in exchange therefor, a new Certificate at the cost of the Holder, evidencing the same number of Equity Units or Stripped Units, as the case may be, and bearing a Certificate number not contemporaneously outstanding. (b) If there shall be delivered to the Company and the Agent (i) evidence to their satisfaction of the destruction, loss or theft of any Certificate, and (ii) such security or indemnity at the cost of the Holder as may be required by them to hold each of them and any agent of any of them harmless, then, in the absence of notice to the Company or the Agent that such Certificate has been acquired by a bona fide purchaser, the Company shall execute and deliver to the Agent, and the Agent shall authenticate, execute on behalf of the Holder, and deliver to the Holder, in lieu of any such destroyed, lost or stolen Certificate, a new Certificate, evidencing the same number of Equity Units or Stripped Units, as the case may be, and bearing a Certificate number not contemporaneously outstanding. (c) Notwithstanding the foregoing, the Company shall not be obligated to execute and deliver to the Agent, and the Agent shall not be obligated to authenticate, execute on behalf of the Holder, and deliver to the Holder, a Certificate on or after the Business Day immediately preceding the earlier of the Stock Purchase Date or the Termination Date. In lieu of delivery of a new Certificate, upon satisfaction of the applicable conditions specified above in this Section and receipt of appropriate registration or transfer instructions from such Holder, the Agent shall (i) if the Stock Purchase Date has occurred, 25 deliver the shares of Common Stock issuable in respect of the Forward Purchase Contracts forming a part of the Equity Units or Stripped Units evidenced by such Certificate, or (ii) if a Termination Event shall have occurred prior to the Stock Purchase Date, transfer the Notes, the appropriate Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio, or the Treasury Securities, as the case may be, evidenced thereby, in each case subject to the applicable conditions and in accordance with the applicable provisions of Article V. (d) Upon the issuance of any new Certificate under this Section, the Company and the Agent may require the payment by the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Agent) connected therewith. (e) Every new Certificate issued pursuant to this Section in lieu of any destroyed, lost or stolen Certificate shall constitute an original contractual obligation of the Company and of the Holder in respect of the Equity Units or Stripped Units, as the case may be, evidenced thereby, whether or not the destroyed, lost or stolen Certificate (and the Equity Units and Stripped Units evidenced thereby) shall be at any time enforceable by anyone, and shall be entitled to all the benefits and be subject to all the obligations of this Agreement equally and proportionately with any and all other Certificates delivered hereunder. (f) The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Certificates. Section 3.11 Persons Deemed Owners. (a) Prior to due presentment of a Certificate for registration of transfer, the Company and the Agent, and any agent of the Company or the Agent, may treat the Person in whose name such Certificate is registered as the owner of the Equity Units or Stripped Units, as the case may be, evidenced thereby, for the purpose of receiving interest payments on the Notes, receiving payment of Contract Adjustment Payments, performance of the Forward Purchase Contracts and for all other purposes whatsoever (subject to Section 4.1(a) and 5.2(a)), whether or not any such payments shall be overdue and notwithstanding any notice to the contrary, and neither the Company nor the Agent, nor any agent of the Company or the Agent, shall be affected by notice to the contrary. (b) Notwithstanding the foregoing, with respect to any Global Certificate, nothing herein shall prevent the Company, the Agent or any agent of the Company or the Agent from giving effect to any written certification, proxy or other authorization furnished by any Clearing Agency (or its nominee), as a Holder, with respect to such Global Certificate or impair, as between such Clearing Agency and owners of beneficial interests in such Global Certificate, the operation of customary practices governing the exercise of rights of such Clearing Agency (or its nominee) as Holder of such Global Certificate. None of the Company, the Agent, or any agent of the Company or the Agent will have any responsibility or liability for any aspect of the records relating to or payments made on 26 account of beneficial ownership interests in a Global Certificate or maintaining, supervising or reviewing any records relating to such beneficial ownership interests. Section 3.12 Cancellation. (a) All Certificates surrendered (i) for delivery of shares of Common Stock on or after any Settlement Date; (ii) upon the transfer of Notes, the appropriate Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio, or Treasury Securities, as the case may be, after the occurrence of a Termination Event; or (iii) upon the registration of a transfer or exchange of Equity Units or Stripped Units, as the case may be, shall, if surrendered to any Person other than the Agent, be delivered to the Agent and, if not already cancelled, shall be promptly cancelled by it. The Company may at any time deliver to the Agent for cancellation any Certificates previously authenticated, executed and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Certificates so delivered shall, upon Issuer Order, be promptly cancelled by the Agent. No Certificates shall be authenticated, executed on behalf of the Holder and delivered in lieu of or in exchange for any Certificates cancelled as provided in this Section, except as expressly permitted by this Agreement. All cancelled Certificates held by the Agent shall be disposed of by the Agent in accordance with its customary procedures. (b) If the Company or any Affiliate of the Company shall acquire any Certificate, such acquisition shall not operate as a cancellation of such Certificate unless and until such Certificate is cancelled or delivered to the Agent for cancellation. Section 3.13 Establishment of Stripped Units. (a) Unless a successful remarketing or a Tax Event Redemption has occurred, a Holder may separate the Pledged Notes from the related Forward Purchase Contracts in respect of the Equity Units held by such Holder by substituting for such Pledged Notes Treasury Securities that will pay, on the Stock Purchase Date, an amount equal to the aggregate principal amount of such Notes (a "Collateral Substitution"), at any time from and after the date of this Agreement and on or prior to the tenth Business Day immediately preceding the Stock Purchase Date, by (i) depositing with the Collateral Agent Treasury Securities having an aggregate principal amount equal to the aggregate Stated Amount of such Equity Units, and (ii) transferring the related Equity Units to the Agent accompanied by a notice to the Agent, substantially in the form of Exhibit D hereto, stating that the Holder has transferred the relevant amount of Treasury Securities to the Collateral Agent and requesting that the Agent instruct the Collateral Agent to release the Pledged Notes underlying such Equity Units, whereupon the Agent shall promptly give such instruction to the Collateral Agent, substantially in the form of Exhibit C hereto. Notwithstanding the foregoing, a Holder may not separate the Pledged Notes from the related Forward Purchase Contracts in respect of the Equity Units held by such Holder during the periods beginning on the fourth Business Day prior to any Remarketing Period and ending on the third Business Day after the end of such Remarketing Period. Upon receipt of the Treasury Securities described in clause (i) above and the instruction described in clause (ii) above, in accordance with the terms of the Pledge Agreement, the Collateral Agent will release to the 27 Agent, on behalf of the Holder, such Pledged Notes from the Pledge, free and clear of the Company's security interest therein, and upon receipt thereof the Agent shall promptly: (i) cancel the related Equity Units; (ii) transfer the Pledged Notes to the Holder; and (iii) authenticate, execute on behalf of such Holder and deliver to such Holder a Stripped Units Certificate executed by the Company in accordance with Section 3.3 evidencing the same number of Forward Purchase Contracts as were evidenced by the cancelled Equity Units. (b) Holders who elect to separate the Pledged Notes from the related Forward Purchase Contract and to substitute Treasury Securities for such Pledged Notes shall be responsible for any fees or expenses payable to the Collateral Agent for its services as Collateral Agent in respect of the substitution, and the Company shall not be responsible for any such fees or expenses. (c) Holders may make Collateral Substitutions if Treasury Securities are being substituted for Pledged Notes, only in integral multiples of 20 Equity Units. (d) In the event a Holder making a Collateral Substitution pursuant to this Section 3.13 fails to effect a book-entry transfer of the Equity Units or fails to deliver an Equity Units Certificate to the Agent after depositing Treasury Securities with the Collateral Agent, the Pledged Notes constituting a part of such Equity Units, and any distributions on such Pledged Notes shall be held in the name of the Agent or its nominee in trust for the benefit of such Holder, until such Equity Units are so transferred or the Equity Units Certificate is so delivered, as the case may be, or, with respect to an Equity Units Certificate, such Holder provides evidence satisfactory to the Company and the Agent that such Equity Units Certificate has been destroyed, lost or stolen, together with any indemnity that may be required by the Agent and the Company. (e) Except as described in this Section 3.13, for so long as the Forward Purchase Contract underlying an Equity Unit remains in effect, such Equity Unit shall not be separable into its constituent parts, and the rights and obligations of the Holder of such Equity Unit in respect of the Note or the appropriate Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio, as the case may be, and the Forward Purchase Contract comprising such Equity Unit may be acquired, and may be transferred and exchanged, only as an Equity Unit. Section 3.14 Reestablishment of Equity Units. (a) Unless a successful remarketing or a Tax Event Redemption has occurred, a Holder of Stripped Units may reestablish Equity Units at any time from and after the date of this Agreement and on or prior to the tenth Business Day immediately preceding the Stock Purchase Date, by (i) depositing with the Collateral Agent the Notes then comprising such number of Equity Units as is equal to such Stripped Units and (ii) transferring such Stripped Units to the Agent accompanied by a notice to the Agent, substantially in the form 28 of Exhibit D hereto, stating that the Holder has transferred the relevant amount of Notes to the Collateral Agent and requesting that the Agent instruct the Collateral Agent to release the Pledged Treasury Securities underlying such Stripped Units, whereupon the Agent shall promptly give such instruction to the Collateral Agent, substantially in the form of Exhibit C hereto. Notwithstanding the foregoing, a Holder may not reestablish Equity Units during the periods beginning on the fourth Business Day prior to any Remarketing Period and ending on the third Business Day after the end of such Remarketing Period. Upon receipt of the Notes described in clause (i) above and the instruction described in clause (ii) above, in accordance with the terms of the Pledge Agreement, the Collateral Agent will release to the Agent, on behalf of the Holder, such Pledged Treasury Securities from the Pledge, free and clear of the Company's security interest therein, and upon receipt thereof the Agent shall promptly: (i) cancel the related Stripped Units; (ii) transfer the Pledged Treasury Securities to the Holder; and (iii) authenticate, execute on behalf of such Holder and deliver an Equity Units Certificate executed by the Company in accordance with Section 3.3 evidencing the same number of Forward Purchase Contracts as were evidenced by the cancelled Stripped Units. (b) Holders of Stripped Units may reestablish Equity Units only in integral multiples of 20 Stripped Units for 20 Equity Units. (c) Except as provided in this Section 3.14, for so long as the Forward Purchase Contract underlying a Stripped Unit remains in effect, such Stripped Unit shall not be separable into its constituent parts, and the rights and obligations of the Holder of such Stripped Unit in respect of the Treasury Security and Forward Purchase Contract comprising such Stripped Unit may be acquired, and may be transferred and exchanged, only as a Stripped Unit. (d) Holders of Stripped Units who reestablish Equity Units shall be responsible for any fees or expenses payable to the Collateral Agent for its services as Collateral Agent in respect of the substitution, and the Company shall not be responsible for any such fees or expenses. (e) In the event a Holder who reestablishes Equity Units pursuant to this Section 3.14 fails to effect a book-entry transfer of the Stripped Units or fails to deliver a Stripped Units Certificate to the Agent after depositing Pledged Notes with the Collateral Agent, the Treasury Securities constituting a part of such Stripped Units, and any distributions on such Treasury Securities shall be held in the name of the Agent or its nominee in trust for the benefit of such Holder, until such Stripped Units are so transferred or the Stripped Units Certificate is so delivered, as the case may be, or, with respect to a Stripped Units Certificate, such Holder provides evidence satisfactory to the Company and the Agent that such Stripped Units Certificate has been destroyed, lost or stolen, together with any indemnity that may be required by the Agent and the Company. 29 Section 3.15 Transfer of Collateral Upon Occurrence of Termination Event. Upon the occurrence of a Termination Event and the transfer to the Agent by the Collateral Agent of the Notes, the appropriate Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio, or the Treasury Securities, as the case may be, underlying the Equity Units or the Stripped Units, as the case may be, pursuant to the terms of the Pledge Agreement, the Agent shall request transfer instructions with respect to such Notes or the appropriate Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio, or Treasury Securities, as the case may be, from each Holder by written request mailed to such Holder at its address as it appears in the Equity Units Register or the Stripped Units Register, as the case may be. Upon book-entry transfer of the Equity Units or Stripped Units or delivery of an Equity Units Certificate or Stripped Units Certificate to the Agent with such transfer instructions, the Agent shall transfer the Notes, the appropriate Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio, or Treasury Securities, as the case may be, underlying such Equity Units or Stripped Units, as the case may be, to such Holder by book-entry transfer, or other appropriate procedures, in accordance with such instructions. In the event a Holder would be entitled to receive less than $1,000 principal amount at maturity of any Treasury security, the Agent shall dispose of such Treasury security for cash and deliver such cash to the Holder. In the event a Holder of Equity Units or Stripped Units fails to effect such transfer or delivery, the Notes, the appropriate Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio or Treasury Securities, as the case may be, underlying such Equity Units or Stripped Units, as the case may be, and any distributions thereon, shall be held in the name of the Agent or its nominee in trust for the benefit of such Holder, until (i) such Equity Units or Stripped Units are transferred or the Equity Units Certificate or Stripped Units Certificate is surrendered or such Holder provides satisfactory evidence that such Equity Units Certificate or Stripped Units Certificate has been destroyed, lost or stolen, together with any indemnity that may be required by the Agent and the Company; and (ii) the expiration of the time period specified in the abandoned property laws of the relevant State. Section 3.16 No Consent to Assumption. Each Holder of Equity Units or Stripped Units, as the case may be, by acceptance thereof, shall be deemed expressly to have withheld any consent to the assumption under Section 365 of the Bankruptcy Code or otherwise, of the Forward Purchase Contract by the Company, any receiver, liquidator or person or entity performing similar functions or its trustee in the event that the Company becomes the debtor under the Bankruptcy Code or subject to other similar state or federal law providing for reorganization or liquidation. ARTICLE IV. THE NOTES Section 4.1 Payment of Interest; Rights to Interest Payments Preserved; Notice. (a) A payment on any Note, Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio, as the case may be, which is paid on any Payment Date other than a Payment Date with respect to the Stated Amount due on Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio shall, subject to receipt thereof by the Agent from the Collateral Agent (if the Collateral Agent is the 30 registered owner thereof) as provided by the terms of the Pledge Agreement, be paid to the Person in whose name the Equity Units Certificate (or one or more Predecessor Equity Units Certificates) of which such Note or the appropriate Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio, as the case may be, is a part is registered at the close of business on the Record Date for such Payment Date. (b) Each Equity Units Certificate evidencing Notes delivered under this Agreement upon registration of transfer of or in exchange for or in lieu of any other Equity Units Certificate shall carry the rights to interest accrued and unpaid which were carried by the Notes and Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio, as the case may be, underlying such other Equity Units Certificate. (c) In the case of any Equity Units with respect to which Early Settlement of the underlying Forward Purchase Contract is effected on an Early Settlement Date, Merger Early Settlement of the underlying Forward Purchase Contract is effected on a Merger Early Settlement Date, Cash Settlement is effected on the seventh Business Day immediately preceding the Stock Purchase Date, or a Collateral Substitution is effected, in each case on a date that is after any Record Date and on or prior to the next succeeding Payment Date, payments on the Note or the appropriate Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio, as the case may be, underlying such Equity Units otherwise payable on such Payment Date shall be payable on such Payment Date notwithstanding such Early Settlement, Merger Early Settlement, Cash Settlement or Collateral Substitution, as the case may be, and such payments shall, subject to receipt thereof by the Agent, be payable to the Person in whose name the Equity Units Certificate (or one or more Predecessor Equity Units Certificates) was registered at the close of business on the Record Date. Except as otherwise expressly provided in the immediately preceding sentence, in the case of any Equity Units with respect to which Early Settlement, Merger Early Settlement or Cash Settlement of the underlying Forward Purchase Contract is effected, or with respect to which a Collateral Substitution has been effected, payments on the related Notes or payments on the appropriate Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio, as the case may be, that would otherwise be payable after the applicable Settlement Date or after such Collateral Substitution, as the case may be, shall not be payable hereunder to the Holder of such Equity Units; provided, that to the extent that such Holder continues to hold the Separate Notes that formerly comprised a part of such Holder's Equity Units, such Holder shall be entitled to receive the payments on such Separate Notes. Section 4.2 Notice and Voting. Under the terms of the Pledge Agreement, the Agent will be entitled to exercise the voting and any other consensual rights pertaining to the Pledged Notes but only to the extent instructed by the Holders as described below. Upon receipt of notice of any meeting at which holders of Notes are entitled to vote or upon any solicitation of consents, waivers or proxies of holders of Notes, the Agent shall, as soon as practicable thereafter, mail to the Holders of Equity Units a notice (a) containing such information as is contained in the notice or solicitation, (b) stating that each Holder on the record date set by the Agent therefor (which, to the extent possible, shall be the same date as the record date for determining the holders of Notes entitled to vote) shall be entitled to 31 instruct the Agent as to the exercise of the voting rights pertaining to the Pledged Notes underlying their Equity Units and (c) stating the manner in which such instructions may be given. Upon the written request of the Holders of Equity Units on such record date, the Agent shall endeavor insofar as practicable to vote or cause to be voted, in accordance with the instructions set forth in such requests, the maximum number of Pledged Notes as to which any particular voting instructions are received. In the absence of specific instructions from the Holder of an Equity Unit, the Agent shall abstain from voting the Pledged Note underlying such Equity Units. The Company hereby agrees, if applicable, to solicit Holders of Equity Units to timely instruct the Agent in order to enable the Agent to vote such Pledged Notes. Section 4.3 Tax Event Redemption. Upon the occurrence of a Tax Event Redemption prior to the earlier of a successful remarketing of the Notes or the Stock Purchase Date, the Company may elect to instruct in writing the Collateral Agent to apply, and upon such written instruction, the Collateral Agent shall apply, out of the aggregate Redemption Price for the Notes that are components of Equity Units, an amount equal to the aggregate Redemption Amount for the Notes that are components of Equity Units to purchase on behalf of the Holders of Equity Units the Treasury Portfolio and promptly remit the remaining portion of such aggregate Redemption Price to the Agent for payment to the Holders of such Equity Units. The Treasury Portfolio will be substituted for the Pledged Notes, and will be pledged to the Collateral Agent in accordance with the terms of the Pledge Agreement to secure the obligation of each Holder of an Equity Units to purchase the Common Stock under the Forward Purchase Contract constituting a part of such Equity Units. Following the occurrence of a Tax Event Redemption prior to the earlier of a successful remarketing of the Notes or the Stock Purchase Date, the Holders of Equity Units and the Collateral Agent shall have such security interests, rights and obligations with respect to the Treasury Portfolio as the Holder of Equity Units and the Collateral Agent had in respect of the Notes, as the case may be, subject to the Pledge thereof as provided in Articles II, III, IV, V and VI of the Pledge Agreement, and any reference herein or in the Certificates to the Note shall be deemed to be a reference to such Treasury Portfolio and any reference herein or in the Certificates to interest on the Notes shall be deemed to be a reference to corresponding distributions on the Treasury Portfolio. The Company may cause to be made in any Equity Units Certificates thereafter to be issued such change in phraseology and form (but not in substance) as may be appropriate to reflect the substitution of the Treasury Portfolio for Notes as collateral. The Company shall cause notice of any Tax Event Redemption to be mailed, at least 30 calendar days but not more than 60 calendar days before such Tax Event Redemption Date, to each Holder of Equity Units including Notes to be redeemed at its registered address. Upon the occurrence of a Tax Event Redemption after the earlier of a successful remarketing of the Notes or the Stock Purchase Date, the Redemption Price will be payable in cash to the holders of the Notes. ARTICLE V. THE FORWARD PURCHASE CONTRACTS; THE REMARKETING Section 5.1 Purchase of Shares of Common Stock. 32 (a) Each Forward Purchase Contract shall, unless an Early Settlement has occurred in accordance with Section 5.9, or a Merger Early Settlement has occurred in accordance with Section 5.10, obligate the Holder of the related Equity Units or Stripped Units, as the case may be, to purchase, and the Company to sell, on the Stock Purchase Date at a price equal to $50 (the "Purchase Price"), a number of newly issued shares of Common Stock equal to the Settlement Rate unless, on or prior to the Stock Purchase Date, there shall have occurred a Termination Event with respect to the Units of which such Forward Purchase Contract is a part. The "Settlement Rate" is equal to, (i) if the Applicable Market Value (as defined below) is greater than or equal to $49.08 (the "Threshold Appreciation Price"), 1.0187 shares of Common Stock per Forward Purchase Contract, (ii) if the Applicable Market Value is less than the Threshold Appreciation Price, but is greater than $40.90, the number of shares of Common Stock per Forward Purchase Contract equal to $50 divided by the Applicable Market Value, and (iii) if the Applicable Market Value is equal to or less than $40.90, 1.2225 shares of Common Stock per Forward Purchase Contract, in each case subject to adjustment as provided in Section 5.6 and in each case rounded upward or downward to the nearest 1/10,000th of a share. As provided in Section 5.12, no fractional shares of Common Stock will be issued upon settlement of Forward Purchase Contracts. Promptly after the calculation of the Settlement Rate and the Applicable Market Value, the Company shall give the Agent notice thereof. All calculations and determinations of the Settlement Rate and the Applicable Market Value shall be made by the Company or its agents based on their good faith calculations, and the Agent shall have no responsibility with respect thereto. (b) The "Applicable Market Value" means the average of the Closing Price per share of Common Stock on each of the 20 consecutive Trading Days ending on the third Trading Day immediately preceding the Stock Purchase Date. The "Closing Price" of the Common Stock on any date of determination means the closing sale price (or, if no closing price is reported, the last reported sale price) of the Common Stock on the New York Stock Exchange (the "NYSE") on such date or, if the Common Stock is not listed for trading on the NYSE on any such date, as reported in the composite transactions for the principal United States securities exchange on which the Common Stock is so listed, or if the Common Stock is not so listed on a United States national or regional securities exchange, as reported by The NASDAQ Stock Market, or, if the Common Stock is not so reported, the last quoted bid price for the Common Stock in the over-the-counter market as reported by the National Quotation Bureau or similar organization, or, if such bid price is not available, the market value of the Common Stock on such date as determined by a nationally recognized independent investment banking firm retained for this purpose by the Company. A "Trading Day" means a day on which the Common Stock (A) is not 33 suspended from trading on any national or regional securities exchange or association or over-the-counter market at the close of business and (B) has traded at least once on the national or regional securities exchange or association or over-the-counter market that is the primary market for the trading of the Common Stock. (c) Each Holder of Equity Units or Stripped Units, as the case may be, by its acceptance thereof, irrevocably authorizes the Agent to enter into and perform the related Forward Purchase Contract on its behalf as its attorney-in-fact (including the execution of Certificates on behalf of such Holder), agrees to be bound by the terms and provisions thereof, covenants and agrees to perform its obligations under such Forward Purchase Contracts, and consents to the provisions hereof, irrevocably authorizes the Agent as its attorney-in-fact to enter into and perform the Pledge Agreement on its behalf as its attorney-in-fact, and consents to and agrees to be bound by the Pledge of the Notes, the appropriate Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio, or the Treasury Securities pursuant to the Pledge Agreement; provided that upon a Termination Event, the rights of the Holder of such Equity Units or Stripped Units, as the case may be, under the Forward Purchase Contract may be enforced without regard to any other rights or obligations. Each Holder of Equity Units or Stripped Units, as the case may be, by its acceptance thereof, further covenants and agrees that, to the extent and in the manner provided in Section 5.4 and the Pledge Agreement, but subject to the terms thereof, payments in respect of the Notes, the appropriate Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio, or the Treasury Securities, to be paid upon settlement of such Holder's obligations to purchase Common Stock under the Forward Purchase Contract, shall be paid on the Stock Purchase Date by the Collateral Agent to the Company in satisfaction of such Holder's obligations under such Forward Purchase Contract and such Holder shall acquire no right, title or interest in such payment. (d) Upon registration of transfer of a Certificate, the transferee shall be bound (without the necessity of any other action on the part of such transferee) under the terms of this Agreement, the Forward Purchase Contracts underlying such Certificate and the Pledge Agreement, and the transferor shall be released from the obligations under this Agreement, the Forward Purchase Contracts underlying the Certificates so transferred and the Pledge Agreement. The Company covenants and agrees, and each Holder of a Certificate, by its acceptance thereof, likewise covenants and agrees, to be bound by the provisions of this paragraph. Section 5.2 Contract Adjustment Payments. (a) Contract Adjustment Payments shall accrue on each Forward Purchase Contract constituting a part of an Equity Unit or Stripped Unit at 3.50% per year of the Stated Amount of such Equity Unit or Stripped Unit, from June 11, 2002 through and including the Stock Purchase Date, provided that no Contract Adjustment Payment shall accrue after an Early Settlement or Merger Early Settlement. Subject to Section 5.3 herein, the Company shall pay, on each Payment Date, the Contract Adjustment Payments, if any, payable in respect of each Forward Purchase Contract to the Person in whose name a Certificate (or one or more Predecessor Certificates) is registered at the close of business on the Record Date immediately preceding such Payment Date in such coin or currency of 34 the United States as at the time of payment shall be legal tender for payments. The Contract Adjustment Payments, if any, will be payable at the office in New York, New York, maintained for that purpose or, at the option of the Company, by check mailed to the address of the Person entitled thereto at such Person's address as it appears on the Register or by wire transfer to the account designated to the Agent by a prior written notice by such Person delivered at least five Business Days prior to the applicable Payment Date. (b) Upon the occurrence of a Termination Event, the Company's obligation to pay Contract Adjustment Payments (including any accrued Deferred Contract Adjustment Payments), if any, shall cease. (c) Each Certificate delivered under this Agreement upon registration of transfer of or in exchange for or in lieu of (including as a result of a Collateral Substitution or the re-establishment of an Equity Unit) any other Certificate shall carry the rights to Contract Adjustment Payments, if any, accrued and unpaid, and to accrue Contract Adjustment Payments, if any, which were carried by the Forward Purchase Contracts underlying such other Certificates. (d) Subject to Sections 5.9 and 5.10, in the case of any Equity Units or Stripped Units, as the case may be, with respect to which Early Settlement or Merger Early Settlement of the underlying Forward Purchase Contract is effected on an Early Settlement Date or a Merger Early Settlement Date, respectively, or in respect of which Cash Settlement of the underlying Forward Purchase Contract is effected on the seventh Business Day immediately preceding the Stock Purchase Date, or with respect to which a Collateral Substitution or an establishment or re-establishment of an Equity Units pursuant to Section 3.14 is effected, in each case on a date that is after any Record Date and on or prior to the next succeeding Payment Date, Contract Adjustment Payments on the Forward Purchase Contract underlying such Equity Units or Stripped Units, as the case may be, otherwise payable on such Payment Date shall be payable on such Payment Date notwithstanding such Cash Settlement, Early Settlement, Merger Early Settlement, Collateral Substitution or establishment or re-establishment of Equity Units, and such Contract Adjustment Payments shall be paid to the Person in whose name the Certificate evidencing such Equity Units or Stripped Units (or one or more Predecessor Certificates) is registered at the close of business on such Record Date. Except as otherwise expressly provided in the immediately preceding sentence, in the case of any Equity Units or Stripped Units with respect to which Cash Settlement, Early Settlement, Merger Early Settlement of the underlying Forward Purchase Contract is effected on the seventh Business Day immediately preceding the Stock Purchase Date, an Early Settlement Date or Merger Early Settlement Date, as the case may be, or with respect to which a Collateral Substitution or an establishment or re-establishment of an Equity Unit has been effected, Contract Adjustment Payments, if any, that would otherwise be payable after the Early Settlement Date, or Merger Early Settlement Date, Collateral Substitution or such establishment or re-establishment with respect to such Forward Purchase Contract shall not be payable. Section 5.3 Deferral of Contract Adjustment Payments. 35 (a) The Company shall have the right, at any time prior to the Stock Purchase Date, to defer the payment of any or all of the Contract Adjustment Payments otherwise payable on any Payment Date, but only if the Company shall give the Holders and the Agent written notice of its election to defer each such deferred Contract Adjustment Payment (specifying the amount to be deferred) at least ten Business Days prior to the earlier of (i) the next succeeding Payment Date or (ii) the date the Company is required to give notice of the Record Date or Payment Date with respect to payment of such Contract Adjustment Payments to the NYSE or other applicable self-regulatory organization or to Holders of the Equity Units and Stripped Units, but in any event not less than one Business Day prior to such Record Date. Any Contract Adjustment Payments so deferred shall, to the extent permitted by law, bear additional Contract Adjustment Payments thereon at the rate of 5.75% per year (computed on the basis of a 360-day year of twelve 30-day months), compounding on each succeeding Payment Date, until paid in full (such deferred installments of Contract Adjustment Payments, if any, together with the additional Contract Adjustment Payments accrued thereon, being referred to herein as the "Deferred Contract Adjustment Payments"). Deferred Contract Adjustment Payments, if any, shall be due on the next succeeding Payment Date except to the extent that payment is deferred pursuant to this Section 5.3. No Contract Adjustment Payments may be deferred to a date that is after the Stock Purchase Date and no such deferral period may end other than on a Payment Date. If the Forward Purchase Contracts are terminated upon the occurrence of a Termination Event, the Holder's right to receive Contract Adjustment Payments, if any, and Deferred Contract Adjustment Payments, will terminate. If Deferred Contract Adjustment Payments are deferred until the Stock Purchase Date, all payments in respect thereof shall be made in cash on the Stock Purchase Date. (b) In the event that the Company elects to defer the payment of Contract Adjustment Payments on the Forward Purchase Contracts until a Payment Date prior to the Stock Purchase Date, then all Deferred Contract Adjustment Payments, if any, shall be payable to the registered Holders as of the close of business on the Record Date immediately preceding such Payment Date. (c) In the event the Company exercises its option to defer the payment of Contract Adjustment Payments then, until the Deferred Contract Adjustment Payments have been paid, the Company shall not declare or pay dividends on, make distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, any of the Company's Common Stock other than: (i) purchases, redemptions or acquisitions of shares of Common Stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers or directors or a stock purchase or dividend reinvestment plan, or the satisfaction by the Company of its obligations pursuant to any contract or security outstanding on the date the Company exercises its right to defer the Contract Adjustment Payments; (ii) as a result of a reclassification of the Company's Capital Stock or the exchange or conversion of one class or series of the Company's Capital Stock for another class or series of the Company's Capital Stock; 36 (iii) the purchase of fractional interests of the Common Stock pursuant to the conversion or exchange provisions of such Common Stock or the security being converted or exchanged; (iv) dividends or distributions in any series of the Company's Common Stock (or rights to acquire Common Stock) or repurchases, acquisitions or redemptions of Common Stock in connection with the issuance or exchange of the Common Stock (or securities convertible into or exchangeable for shares of the Company's Common Stock); or (v) redemptions, exchanges or repurchases of any rights outstanding under a shareholder rights plan or the declaration or payment thereunder of a dividend or distribution of or with respect to rights in the future. Section 5.4 Payment of Purchase Price; Remarketing. (a) Unless a Tax Event Redemption, successful remarketing, Termination Event, Merger Early Settlement or Early Settlement has occurred, each Holder of an Equity Unit may pay in cash ("Cash Settlement") the Purchase Price for the shares of Common Stock to be purchased pursuant to a Forward Purchase Contract if such Holder notifies the Agent by use of a notice in substantially the form of Exhibit E hereto of its intention to make a Cash Settlement. Such notice shall be made on or prior to 5:00 p.m., New York City time, on the tenth Business Day immediately preceding the Stock Purchase Date. The Agent shall promptly notify the Collateral Agent of the receipt of such a notice from a Holder intending to make a Cash Settlement. (i) A Holder of an Equity Unit who has so notified the Agent of its intention to make a Cash Settlement is required to pay the Purchase Price to the Collateral Agent prior to 11:00 a.m., New York City time, on the seventh Business Day immediately preceding the Stock Purchase Date in lawful money of the United States by certified or cashiers' check or wire transfer, in each case payable to or upon the order of the Company. Any cash received by the Collateral Agent will be paid to the Company on the Stock Purchase Date in settlement of the Forward Purchase Contract in accordance with the terms of this Agreement and the Pledge Agreement. (ii) If a Holder of an Equity Unit fails to notify the Agent of its intention to make a Cash Settlement in accordance with this paragraph (a), the Holder shall be deemed to have consented to the disposition of the Pledged Notes pursuant to the remarketing as described in paragraph 5.4(b) below. If a Holder of an Equity Unit does notify the Agent as provided in this paragraph (a) of its intention to pay the Purchase Price in cash, but fails to make such payment as required by paragraph (a)(i) above, the Holder shall be deemed to have consented to the disposition of the Pledged Notes pursuant to the remarketing as described in paragraph 5.4 (b) below. (b) The Company has engaged the Remarketing Agent to sell the Notes of (A) Holders of Equity Units, other than Holders that have elected not to participate in the 37 remarketing pursuant to the procedures set forth in subsection (g) below, and (B) holders of Separate Notes that have elected to participate in the remarketing pursuant to the procedures set forth in Section 4.5(d) of the Pledge Agreement. On the seventh Business Day prior to the Remarketing Date, the Agent shall give Holders of Equity Units and holders of Separate Notes notice of the remarketing (the form of which notice to be provided by the Company) in a daily newspaper in the English language of general circulation in The City of New York, which is expected to be The Wall Street Journal, including the specific U.S. Treasury security or securities (including the CUSIP number and/or the principal terms of such Treasury security or securities) described in subsection (g) below, that must be delivered by Holders of Equity Units that elect not to participate in the remarketing pursuant to subsection (g) below, no later than 10:00 a.m., New York City time, on the fourth Business Day preceding the Remarketing Date or the first day of any Subsequent Remarketing Period, as applicable. The Agent shall notify, by 10:00 a.m., New York City time, on the third Business Day preceding the Remarketing Date or the first day of any subsequent Remarketing Period, as applicable, the Remarketing Agent and the Collateral Agent of the aggregate number of Notes of Equity Units Holders to be remarketed. On the third Business Day immediately preceding the Remarketing Date or the first day of any subsequent Remarketing Period, as applicable, no later than by 10:00 a.m. New York City time, pursuant to the terms of the Pledge Agreement, the Custodial Agent will notify the Remarketing Agent of the aggregate number of Separate Notes to be remarketed. On the third Business Day immediately preceding the Remarketing Date or the first day of any subsequent Remarketing Period, as applicable, the Collateral Agent and the Custodial Agent, pursuant to the terms of the Pledge Agreement, will deliver for remarketing to the Remarketing Agent all Notes to be remarketed. (c) Upon receipt of such notice from the Agent and the Custodial Agent and such Notes from the Collateral Agent and the Custodial Agent, the Remarketing Agent will, on the Remarketing Date, use its commercially reasonable best efforts to (i) establish a rate of interest that, in the opinion of the Remarketing Agent, will, when applied to the outstanding Notes, enable the then current aggregate market value of the Notes to have a value equal to approximately, but not less than, 100.25% of the Remarketing Value as of the Remarketing Date or as of any Subsequent Remarketing Date, as the case may be (the "Reset Rate") and (ii) sell such Notes on such date at a price equal to approximately, but not less than, 100.25% of the Remarketing Value. (d) If the remarketing occurs prior to the fourth Business Day preceding the Stock Purchase Date, the Remarketing Agent will use the proceeds from a successful remarketing to purchase the appropriate U.S. Treasury securities (the "Agent-purchased Treasury Consideration") with the CUSIP numbers, if any, selected by the Remarketing Agent, described in clauses (1) and (2) of the definition of Remarketing Value related to the Notes of Holders of Equity Units or that were remarketed. On or prior to the third Business Day following the Remarketing Date or any Subsequent Remarketing Date the Remarketing Agent shall deliver such Agent-purchased Treasury Consideration to the Agent, which shall thereupon deliver such Agent-purchased Treasury Consideration to the Collateral Agent. The Collateral Agent, for the benefit of the Company, will thereupon apply such Agent-purchased Treasury Consideration, in accordance with the Pledge Agreement, to secure such Holders' obligations under the Forward Purchase Contracts. If the remarketing 38 occurs on or after the fourth Business Day preceding the Stock Purchase Date, the proceeds of the remarketing will not be used to purchase the Agent-purchased Treasury Consideration, but such proceeds will be paid to the Agent in direct settlement of the obligations of the Holders under the related Forward Purchase Contracts to purchase Common Stock of the Company. The Remarketing Agent will deduct as a remarketing fee an amount not exceeding 25 basis points (0.25%) of the total proceeds from the remarketing (the "Remarketing Fee"). The Remarketing Agent will remit (1) the remaining portion of the proceeds from the remarketing attributable to the Separate Notes to the Custodial Agent for the benefit of the holders of Separate Notes that were remarketed and (2) the remaining portion of the proceeds, less those proceeds used to purchase the Agent-purchased Treasury Consideration or to pay the Company in direct settlement of the Holders' obligations under the Forward Purchase Contracts, to the Agent for payment to the Holders of the Equity Units that were remarketed, all determined on a pro rata basis, in each case, on or prior to the third Business Day following such Remarketing Date or Subsequent Remarketing Date. Holders whose Notes are so remarketed will not otherwise be responsible for the payment of any Remarketing Fee in connection therewith. (e) (i) If, in spite of using its commercially reasonable best efforts, the Remarketing Agent cannot establish the Reset Rate and remarket the Notes included in the remarketing at a price equal to approximately, but not less than, 100.25% of the Remarketing Value, the Remarketing Agent will again attempt to establish the Reset Rate and remarket the Notes included in the remarketing at a price equal to approximately, but not less than, 100.25% of the Remarketing Value on each of the two immediately following Business Days. If the Remarketing Agent cannot remarket the Notes included in the remarketing at a price equal to approximately, but not less than, 100.25% of the Remarketing Value on either of those days, it will attempt to establish the Reset Rate and remarket the Notes included in the remarketing at a price equal to approximately, but not less than, 100.25% of the Remarketing Value on each of the three Business Days immediately preceding June 16, 2005. If the Remarketing Agent cannot remarket the Notes included in the remarketing at a price equal to approximately, but not less than, 100.25% of the Remarketing Value on any of those days, it will attempt to establish the Reset Rate and remarket the Notes included in the remarketing at a price equal to approximately, but not less than, 100.25% of the Remarketing Value on each of the three Business Days immediately preceding July 16, 2005. If the Remarketing Agent cannot establish the Reset Rate and remarket the Notes included in the remarketing at a price equal to approximately, but not less than, 100.25% of the Remarketing Value either on any of the two Business Days immediately following the Remarketing Date or on any of the three Business Days immediately preceding June 16, 2005 or on any of the three Business Days immediately preceding July 16, 2005, the remarketing in each period will be deemed to have failed (each, a "Failed Remarketing"). If the Remarketing Agent cannot establish the Reset Rate and remarket the Notes included in the remarketing at a price equal to approximately, but not less than, 100.25% of the Remarketing Value on any of the three Business Days immediately preceding July 16, 2005, the Remarketing Agent will further attempt to establish the Reset Rate and remarket the Notes included in the remarketing at a price equal to approximately, but not less than, 100.25% of the Remarketing Value on each of the three Business Days immediately preceding August 12, 2005. If, in spite of using its commercially reasonable best efforts, the Remarketing Agent fails to remarket the Notes 39 underlying the Equity Units at a price equal to approximately, but not less than, 100.25% of the Remarketing Value in accordance with the terms of the Pledge Agreement by 4:00 p.m., New York City time, on the third Business Day immediately preceding the Stock Purchase Date, a "Last Failed Remarketing" will be deemed to have occurred. (ii) Within three Business Days following the end of the Last Failed Remarketing, the Remarketing Agent shall return any Notes delivered to it to the Collateral Agent and the Custodial Agent, as applicable, together with written notice from the Remarketing Agent of such Last Failed Remarketing. The Collateral Agent, for the benefit of the Company, may exercise its rights as a secured party with respect to such Notes, including those actions specified in Section 5.4(f) below, and the Holders of Equity Units, by their acceptance of the Equity Units shall be deemed to have agreed to such exercise by the Collateral Agent in such case; provided, that if upon the Last Failed Remarketing, the Collateral Agent delivers any Notes to the Company in full satisfaction of the Holder's obligation under the related Forward Purchase Contracts, any accumulated and unpaid interest on such Notes will become payable by the Company to the Agent for payment to the Holder of the Equity Units to which such Notes relate. Such payment will be made by the Company on or prior to 11:00 a.m., New York City time, on the Stock Purchase Date in lawful money of the United States by certified or cashier's check or wire transfer in immediately available funds payable to or upon the order of the Agent. The Company will publish notice by means of Bloomberg and Reuters newswires of any Remarketing Period during which no successful remarketing occurred, such notice to be published not later than the fourth Business Day following the end of such Remarketing Period. The Company will also cause a notice of the Last Failed Remarketing to be published on the fourth Business Day following the date of the Last Failed Remarketing in a daily newspaper in the English language of general circulation in The City of New York, which is expected to be The Wall Street Journal. (f) With respect to any Notes which constitute part of Equity Units which are subject to the Last Failed Remarketing, the Collateral Agent for the benefit of the Company reserves all of its rights as a secured party with respect thereto and, subject to applicable law and Section 5.4 (j) below, may, among other things, permit the Company to cause the Notes to be sold or to retain and cancel such Notes, in either case, in full satisfaction of the Holders' obligations under the Forward Purchase Contracts and the Holders of the Equity Units, by their acceptance of the Equity Units shall be deemed to have agreed to such action by the Collateral Agent. (g) A Holder of Equity Units may elect not to participate in the remarketing and retain the Notes underlying such Equity Units by notifying the Agent of such election and delivering the specific U.S. Treasury security or securities (including the CUSIP number and/or the principal terms of such security or securities) identified by the Agent that constitute the U.S. Treasury securities described in clauses (1) and (2) of the definition of Remarketing Value relating to the retained Notes (as if only such Notes were being remarketed) (the "Opt-out Treasury Consideration") to the Agent not later than 10:00 a.m. on the fourth Business Day prior to the Remarketing Date (or, in the case of a Failed Remarketing, not later than 10:00 a.m. on the fourth Business Day immediately prior to the subsequent Remarketing Period). Upon receipt thereof by the Agent, the Agent shall 40 deliver such Opt-out Treasury Consideration to the Collateral Agent, which will, for the benefit of the Company, thereupon apply such Opt-out Treasury Consideration to secure such Holder's obligations under the Forward Purchase Contracts. On the first Business Day immediately preceding the Remarketing Date (or, in the case of a Failed Remarketing, the subsequent Remarketing Period), the Collateral Agent, pursuant to the terms of the Pledge Agreement, will deliver the Pledged Notes of such Holder to the Agent. Within three Business Days following any Remarketing Period, (A) if the remarketing was successful, the Agent shall distribute such Notes to the new holders thereof, and (B) if there was a Failed Remarketing, the Agent will deliver such Notes to the Collateral Agent, which will, for the benefit of the Company, thereupon apply such Notes to secure such Holders' obligations under the Forward Purchase Contracts and return the Opt-out Treasury Consideration delivered by such Holders to such Holders. A Holder that does not so deliver the Opt-out Treasury Consideration pursuant to this clause (g) shall be deemed to have elected to participate in the remarketing. (h) Upon the maturity of the Pledged Treasury Securities underlying the Stripped Units and the Pledged Treasury Consideration or Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may be, underlying the Equity Units, on the Stock Purchase Date, the Collateral Agent shall remit to the Company an amount equal to the aggregate Purchase Price applicable to such Units, as payment for the Common Stock issuable upon settlement thereof without receiving any instructions from the Holders of such Units. In the event the payments in respect of the Pledged Treasury Securities, Pledged Treasury Consideration or Pledged Applicable Ownership Interest in the Treasury Portfolio underlying a Unit are in excess of the Purchase Price under the Forward Purchase Contract being settled thereby, the Collateral Agent will distribute such excess to the Agent for the benefit of the Holder of such Units when received. (i) Any distribution to Holders of excess funds and interest described in Section 5.4(c) and (d) above shall be payable at the Office of the Agent in The City of New York maintained for that purpose or, at the option of the Holder or the holder of Separate Notes, as applicable, by check mailed to the address of the Person entitled thereto at such address as it appears on the relevant Register or by wire transfer to an account specified by the Holder or the holder of Separate Notes, as applicable. (j) The obligations of each Holder to pay the Purchase Price are non-recourse obligations and except to the extent paid by Cash Settlement, Early Settlement or Merger Early Settlement, are payable solely out of the proceeds of any Collateral pledged to secure the obligations of the Holder, and in no event will any Holder be liable for any deficiency between such proceeds and the Purchase Price. (k) Notwithstanding anything to the contrary herein, the Company shall not be obligated to issue any Common Stock in respect of a Forward Purchase Contract or deliver any certificates therefor to the Holder of the related Equity Units or Stripped Units, as the case may be, unless the Company shall have received payment in full for the shares of Common Stock to be purchased thereunder by such Holder in the manner herein set forth. 41 (l) In the event of a successful remarketing, the interest rate on all of the outstanding Notes (whether or not included in the remarketing) shall be adjusted to the Reset Rate. Section 5.5 Issuance of Shares of Common Stock. Unless a Termination Event shall have occurred on or prior to the Stock Purchase Date or an Early Settlement or a Merger Early Settlement shall have occurred with respect to all of the outstanding Units, on the Stock Purchase Date, upon its receipt of payment for the shares of Common Stock purchased by the Holders pursuant to the provisions of this Article and subject to Section 5.4, the Company shall issue and deposit with the Agent, for the benefit of the Holders of the Outstanding Units, one or more certificates or book-entry interests representing the newly issued shares of Common Stock registered in the name of the Agent (or its nominee) as custodian for the Holders (such certificates or book-entry interests for shares of Common Stock, together with any dividends or distributions for which a record date and payment date for such dividend or distribution has occurred after the Stock Purchase Date, being hereinafter referred to as the "Forward Purchase Contract Settlement Fund") to which the Holders are entitled hereunder. Subject to the foregoing, upon surrender of a Certificate to the Agent on or after the Stock Purchase Date, together with settlement instructions thereon duly completed and executed, the Holder of such Certificate shall be entitled to receive in exchange therefor a certificate or book-entry interest representing that number of whole shares of Common Stock which such Holder is entitled to receive pursuant to the provisions of this Article V (after taking into account all Equity Units and Stripped Units then held by such Holder) together with cash in lieu of fractional shares as provided in Section 5.12 and any dividends or distributions with respect to such shares constituting part of the Forward Purchase Contract Settlement Fund, but without any interest thereon, and the Certificate so surrendered shall forthwith be cancelled. Such shares shall be registered in the name of the Holder or the Holder's designee as specified in the settlement instructions provided by the Holder to the Agent. If any shares of Common Stock issued in respect of a Forward Purchase Contract are to be registered to a Person other than the Person in whose name the Certificate evidencing such Forward Purchase Contract is registered, no such registration shall be made unless the Person requesting such registration has paid any transfer and other taxes required by reason of such registration in a name other than that of the registered Holder of such Certificate or has established to the satisfaction of the Company that such tax either has been paid or is not payable. Section 5.6 Adjustment of Settlement Rate. (a) Adjustments for Dividends, Distributions, Stock Splits, Etc. (l) Stock Dividends. In case the Company shall pay or make a dividend or other distribution on the Common Stock in Common Stock, the Settlement Rate or Early Settlement Rate, as applicable, as in effect at the opening of business on the day following the date fixed for the determination of stockholders entitled to receive such dividend or other distribution shall be increased by dividing such Settlement Rate or Early Settlement Rate by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on the date 42 fixed for such determination and the denominator shall be the sum of such number of shares and the total number of shares constituting such dividend or other distribution, such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this paragraph (1), the number of shares of Common Stock at the time outstanding shall not include shares held in the treasury of the Company but shall include any shares issuable in respect of any scrip certificates issued in lieu of fractions of shares of Common Stock. The Company will not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company. (2) Stock Purchase Rights. In case the Company shall issue rights, options or warrants to all holders of its Common Stock (not being available on an equivalent basis to Holders of the Equity Units and Stripped Units upon settlement of the Forward Purchase Contracts underlying such Equity Units and Stripped Units) entitling them to subscribe for or purchase shares of Common Stock at a price per share less than the Current Market Price per share of the Common Stock on the date fixed for the determination of stockholders entitled to receive such rights, options or warrants (other than pursuant to a dividend reinvestment, share purchase or similar plan), the Settlement Rate or Early Settlement Rate, as applicable, in effect at the opening of business on the day following the date fixed for such determination shall be increased by dividing such Settlement Rate or Early Settlement Rate, as applicable, by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock which the aggregate of the offering price of the total number of shares of Common Stock so offered for subscription or purchase would purchase at such Current Market Price and the denominator of which shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock so offered for subscription or purchase, such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this paragraph (2), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include any shares issuable in respect of any scrip certificates issued in lieu of fractions of shares of Common Stock. The Company shall not issue any such rights, options or warrants in respect of shares of Common Stock held in the treasury of the Company. (3) Stock Splits; Reverse Splits. In case outstanding shares of Common Stock shall be subdivided or split into a greater number of shares of Common Stock, the Settlement Rate or Early Settlement Rate, as applicable, in effect at the opening of business on the day following the day upon which such subdivision or split becomes effective shall be proportionately increased, and, conversely, in case outstanding shares of 43 Common Stock shall be combined into a smaller number of shares of Common Stock, the Settlement Rate or Early Settlement Rate, as applicable, in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately reduced, such increase or reduction, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision, split or combination becomes effective. (4) Debt or Asset Distributions. (i) In case the Company shall, by dividend or otherwise, distribute to all holders of its Common Stock evidences of its indebtedness or assets (including securities, but excluding any rights or warrants referred to in paragraph (2) of this Section, any dividend or distribution paid exclusively in cash and any dividend, shares of capital stock of any class or series, or similar equity interests, of or relating to a subsidiary or other business unit in the case of a Spin-Off referred to in the next paragraph, or distribution referred to in paragraph (1) of this Section), the Settlement Rate or Early Settlement Rate, as applicable, shall be adjusted so that the same shall equal the rate determined by dividing the Settlement Rate or Early Settlement Rate, as applicable, in effect immediately prior to the close of business on the date fixed for the determination of stockholders entitled to receive such distribution by a fraction, the numerator of which shall be the Current Market Price per share of the Common Stock on the date fixed for such determination less the then fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) of the portion of the assets or evidences of indebtedness so distributed applicable to one share of Common Stock and the denominator of which shall be such Current Market Price per share of the Common Stock, such adjustment to become effective immediately prior to the opening of business on the day following the date fixed for the determination of stockholders entitled to receive such distribution. In any case in which this paragraph (4) is applicable, paragraph (2) of this Section shall not be applicable. (ii) In the case of a Spin-Off, the Settlement Rate or Early Settlement Rate, as applicable, in effect immediately before the close of business on the record date fixed for determination of stockholders entitled to receive that distribution will be increased by multiplying the Settlement Rate or Early Settlement Rate, as applicable, by a fraction, the numerator of which is the Current Market Price per share of the Common Stock plus the Fair Market Value of the portion of those shares of Capital Stock or similar equity interests so distributed applicable to one share of Common Stock and the denominator of which is the Current Market Price per share of the Common Stock. Any adjustment to the Settlement Rate or Early Settlement Rate under this paragraph 4(ii) will occur at the earlier of (1) the tenth Trading Day from, and including, the effective date of the Spin-Off and (2) the date of the securities being offered in the Initial Public Offering of the Spin-Off, if that Initial Public Offering is effected simultaneously with the Spin-Off. 44 (5) Cash Distributions. In case the Company shall, (i) by dividend or otherwise, distribute to all holders of its Common Stock cash (excluding any cash that is distributed in a Reorganization Event to which Section 5.6(b) applies or as part of a distribution referred to in paragraph (4) of this Section) in an aggregate amount that, combined together with (ii) the aggregate amount of any other distributions to all holders of its Common Stock made exclusively in cash within the 12 months preceding the date of payment of such distribution and in respect of which no adjustment pursuant to this paragraph (5) or paragraph (6) of this Section has been made and (iii) the aggregate of any cash plus the fair market value as of the date of the expiration of the tender or exchange offer referred to below (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) of consideration payable in respect of any tender or exchange offer by the Company or any of its subsidiaries for all or any portion of the Common Stock concluded within the 12 months preceding the date of payment of the distribution described in clause (i) above and in respect of which no adjustment pursuant to this paragraph (5) or paragraph (6) of this Section has been made, exceeds 15% of the product of the Current Market Price per share of the Common Stock on the date for the determination of holders of shares of Common Stock entitled to receive such distribution times the number of shares of Common Stock outstanding on such date, then, and in each such case, immediately after the close of business on such date for determination, the Settlement Rate or Early Settlement Rate, as applicable, shall be increased so that the same shall equal the rate determined by dividing the Settlement Rate or Early Settlement Rate, as applicable, in effect immediately prior to the close of business on the date fixed for determination of the stockholders entitled to receive such distribution by a fraction (A) the numerator of which shall be equal to the Current Market Price per share of the Common Stock on the date fixed for such determination less an amount equal to the quotient of (x) the combined amount distributed or payable in the transactions described in clauses (i), (ii) and (iii) above and (y) the number of shares of Common Stock outstanding on such date for determination and (B) the denominator of which shall be equal to the Current Market Price per share of the Common Stock on such date for determination. (6) Tender Offers. In case (i) a tender or exchange offer made by the Company or any subsidiary of the Company for all or any portion of the Common Stock shall expire and such tender or exchange offer (as amended upon the expiration thereof) shall require the payment to stockholders (based on the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of Purchased Shares) of an aggregate consideration having a fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) that combined together with (ii) the aggregate of the cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution), as 45 of the expiration of such tender or exchange offer, of consideration payable in respect of any other tender or exchange offer, by the Company or any subsidiary of the Company for all or any portion of the Common Stock expiring within the 12 months preceding the expiration of such tender or exchange offer and in respect of which no adjustment pursuant to paragraph (5) of this Section or this paragraph (6) has been made and (iii) the aggregate amount of any distributions to all holders of the Company's Common Stock made exclusively in cash within the 12 months preceding the expiration of such tender or exchange offer and in respect of which no adjustment pursuant to paragraph (5) of this Section or this paragraph (6) has been made, exceeds 15% of the product of the Current Market Price per share of the Common Stock as of the last time (the "Expiration Time") tenders could have been made pursuant to such tender or exchange offer (as it may be amended) times the number of shares of Common Stock outstanding (including any tendered shares) at the Expiration Time, then, and in each such case, immediately prior to the opening of business on the day after the date of the Expiration Time, the Settlement Rate or Early Settlement Rate, as applicable, shall be adjusted so that the same shall equal the rate determined by dividing the Settlement Rate or Early Settlement Rate, as applicable, immediately prior to the close of business on the date of the Expiration Time by a fraction (A) the numerator of which shall be equal to (x) the product of (I) the Current Market Price per share of the Common Stock on the date of the Expiration Time and (II) the number of shares of Common Stock outstanding (including any tendered shares) at the Expiration Time less (y) the amount of cash plus the fair market value (determined as aforesaid) of the aggregate consideration payable to stockholders based on the transactions described in clauses (i), (ii) and (iii) above (assuming in the case of clause (i) the acceptance, up to any maximum specified in the terms of the tender or exchange offer, of Purchased Shares), and (B) the denominator of which shall be equal to the product of (x) the Current Market Price per share of the Common Stock as of the Expiration Time and (y) the number of shares of Common Stock outstanding (including any tendered shares) as of the Expiration Time less the number of all shares validly tendered and not withdrawn as of the Expiration Time (the shares deemed so accepted, up to any such maximum, being referred to as the "Purchased Shares"). (7) Reclassification. The reclassification of Common Stock into securities including securities other than Common Stock (other than any reclassification upon a Reorganization Event to which Section 5.6(b) applies) shall be deemed to involve (i) a distribution of such securities other than Common Stock to all holders of Common Stock (and the effective date of such reclassification shall be deemed to be "the date fixed for the determination of stockholders entitled to receive such distribution" and the "date fixed for such determination" within the meaning of paragraph (4) of this Section), and (ii) a subdivision, split or combination, as the case may be, of the number of shares of Common Stock outstanding immediately 46 prior to such reclassification into the number of shares of Common Stock outstanding immediately thereafter (and the effective date of such reclassification shall be deemed to be "the day upon which such subdivision or split becomes effective" or "the day upon which such combination becomes effective," as the case may be, and "the day upon which such subdivision, split or combination becomes effective" within the meaning of paragraph (3) of this Section). (8) "Current Market Price". The "Current Market Price" of the Common Stock means (a) on any day the average of the Sales Prices for the 5 consecutive Trading Days preceding the earlier of the day preceding the day in question and the day before the "ex date" with respect to the issuance or distribution requiring computation, (b) in the case of any Spin-Off that is effected simultaneously with an Initial Public Offering of the securities being distributed in the Spin-Off, the Sale Price of the Common Stock on the Trading Day on which the Initial Public Offering price of the securities being distributed in the Spin-Off is determined, and (c) in the case of any other Spin-Off, the average of the Sale Prices of the Common Stock over the first 10 Trading Days after the effective date of such Spin-Off. For purposes of this paragraph, the term "ex date," when used with respect to any issuance or distribution, shall mean the first date on which the Common Stock trades regular way on the relevant exchange or in the relevant market without the right to receive such issuance or distribution. (9) Calculation of Adjustments. All adjustments to the Settlement Rate or Early Settlement Rate, as applicable, shall be calculated to the nearest 1/10,000th of a share of Common Stock (or if there is not a nearest 1/10,000th of a share to the next lower 1/10,000th of a share). No adjustment in the Settlement Rate or Early Settlement Rate, as applicable, shall be required unless such adjustment would require an increase or decrease of at least one percent therein; provided, that any adjustments which by reason of this subparagraph are not required to be made shall be carried forward and taken into account in any subsequent adjustment. If an adjustment is made to the Settlement Rate or Early Settlement Rate, as applicable, pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.6(a), an adjustment shall also be made to the Applicable Market Value solely to determine which of clauses (i), (ii) or (iii) of the definition of Settlement Rate or Early Settlement Rate, as applicable, in Section 5.1(a) will apply on the Stock Purchase Date. Such adjustment shall be made by multiplying the Applicable Market Value by a fraction, the numerator of which shall be the Settlement Rate or Early Settlement Rate, as applicable, immediately after such adjustment pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.6(a) and the denominator of which shall be the Settlement Rate or Early Settlement Rate, as applicable, immediately before such adjustment; provided, that if such adjustment to the Settlement Rate or Early Settlement Rate, as applicable, is required to be made pursuant to the occurrence of any of the events contemplated by paragraph 47 (1), (2), (3), (4), (5), (7) or (10) of this Section 5.6(a) during the period taken into consideration for determining the Applicable Market Value, appropriate and customary adjustments shall be made to the Settlement Rate or Early Settlement Rate, as applicable. (10) Increase of Settlement Rate. The Company may make such increases in the Settlement Rate or Early Settlement Rate, as applicable, in addition to those required by this Section, as it considers to be advisable in order to avoid or diminish any income tax to any holders of shares of Common Stock resulting from any dividend or distribution of stock or issuance of rights or warrants to purchase or subscribe for stock or from any event treated as such for income tax purposes or for any other reasons. (b) Adjustment for Consolidation, Merger or Other Reorganization Event. In the event of (1) any consolidation or merger of the Company with or into another Person (other than a merger or consolidation in which the Company is the continuing corporation and in which the Common Stock outstanding immediately prior to the merger or consolidation is not exchanged for cash, securities or other property of the Company or another corporation), (2) any sale, transfer, lease or conveyance to another Person of the property of the Company as an entirety or substantially as an entirety, (3) any statutory exchange of securities of the Company with another Person (other than in connection with a merger or acquisition), or (4) any liquidation, dissolution or winding up of the Company other than as a result of or after the occurrence of a Termination Event (any such event, a "Reorganization Event"), each share of Common Stock covered by each Forward Purchase Contract forming a part of an Equity Unit or Stripped Unit, as the case may be, immediately prior to such Reorganization Event shall, after such Reorganization Event, be converted for purposes of the Forward Purchase Contract into the kind and amount of securities, cash and other property receivable in such Reorganization Event (without any interest thereon, and without any right to dividends or distributions thereon which have a record date that is prior to the Stock Purchase Date) per share of Common Stock by a holder of Common Stock that (i) is not a Person with which the Company consolidated or into which the Company merged or which merged into the Company or to which such sale or transfer was made, as the case may be (any such Person, a "Constituent Person"), or an Affiliate of a Constituent Person to the extent such Reorganization Event provides for different treatment of Common Stock held by Affiliates of the Company and non-Affiliates, and (ii) failed to exercise his rights of election, if any, as to the kind or amount of securities, cash and other property receivable upon such Reorganization Event (provided that if the kind or amount of securities, cash and other property receivable upon such Reorganization Event is not the same for each share of Common Stock held immediately prior to such Reorganization Event by other than a 48 Constituent Person or an Affiliate thereof and in respect of which such rights of election shall not have been exercised ("Non-electing Share"), then for the purpose of this Section the kind and amount of securities, cash and other property receivable upon such Reorganization Event by each Non-electing Share shall be deemed to be the kind and amount so receivable per share by a plurality of the Non-electing Shares). On the Stock Purchase Date, the Settlement Rate then in effect will be applied to the value on the Stock Purchase Date of such securities, cash or other property. In the event of such a Reorganization Event, the Person formed by such consolidation, merger or exchange or the Person which acquires the assets of the Company or, in the event of a liquidation or dissolution of the Company, the Company or a liquidating trust created in connection therewith, shall execute and deliver to the Agent an agreement supplemental hereto providing that the Holder of each Outstanding Unit shall have the rights provided by this Section 5.6. Such supplemental agreement shall provide for adjustments which, for events subsequent to the effective date of such supplemental agreement, shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section. The above provisions of this Section shall similarly apply to successive Reorganization Events. Section 5.7 Notice of Adjustments and Certain Other Events. (a) Whenever the Settlement Rate or Early Settlement Rate, as applicable, is adjusted as herein provided, the Company shall: (i) forthwith compute the Settlement Rate or Early Settlement Rate, as applicable, and the Applicable Market Value in accordance with Section 5.6 and prepare and transmit to the Agent an Officer's Certificate setting forth the Settlement Rate and the Applicable Market Value, the method of calculation thereof in reasonable detail, and the facts requiring such adjustment and upon which such adjustment is based; and (ii) as soon as practicable following the occurrence of an event that requires an adjustment to the Settlement Rate or Early Settlement Rate, as applicable, pursuant to Section 5.6 (or if the Company is not aware of such occurrence, as soon as practicable after becoming so aware), provide a written notice to the Holders of the Equity Units and Stripped Units of the occurrence of such event and a statement in reasonable detail setting forth the method by which the adjustment to the Settlement Rate or Early Settlement Rate, as applicable, and the Applicable Market Value was determined and setting forth the adjusted Settlement Rate or Early Settlement Rate, as applicable, and the Applicable Market Value. (b) The Agent shall not at any time be under any duty or responsibility to any Holder of Equity Units and Stripped Units to determine whether any facts exist which may require any adjustment of the Settlement Rate or Early Settlement Rate, as applicable, and the Applicable Market Value, or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed in making the same. The Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities or property, which may at any time be issued or delivered with respect to any Forward Purchase Contract; and the 49 Agent makes no representation with respect thereto. The Agent shall not be responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock pursuant to a Forward Purchase Contract or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article. Section 5.8 Termination Event; Notice. The Forward Purchase Contracts and all obligations and rights of the Company and the Holders thereunder, including the rights and obligations of Holders to purchase Common Stock, shall immediately and automatically terminate, without the necessity of any notice or action by any Holder, the Agent or the Company, if, on or prior to the Stock Purchase Date, a Termination Event shall have occurred. Upon and after the occurrence of a Termination Event, the Equity Units shall thereafter represent the right to receive the Notes or the appropriate Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio, as the case may be, forming a part of such Equity Units, and the Stripped Units shall thereafter represent the right to receive the Treasury Securities forming a part of such Stripped Units, in each case in accordance with the provisions of Section 4.3 of the Pledge Agreement. Upon the occurrence of a Termination Event, the Company shall promptly but in no event later than two Business Days thereafter give written notice to the Agent, the Collateral Agent and to the Holders, at their addresses as they appear in the applicable Register. Section 5.9 Early Settlement. (a) Subject to and upon compliance with the provisions of this Section 5.9, Forward Purchase Contracts underlying Equity Units or Stripped Units may, at the option of the Holder thereof, be settled early ("Early Settlement") at any time not later than 10:00 a.m. on the seventh Business Day immediately preceding the Stock Purchase Date. In order to exercise the right to effect Early Settlement with respect to any Forward Purchase Contracts, the Holder of the Certificate evidencing the related Equity Units or Stripped Units, as the case may be, shall deliver such Certificate to the Agent at the Corporate Trust Office duly endorsed for transfer to the Company or in blank with the form of Election to Settle Early on the reverse thereof duly completed and accompanied by payment payable to the Company in immediately available funds in an amount (the "Early Settlement Amount") equal to (A) the product of (i) the Stated Amount of such Equity Units or Stripped Units, as the case may be, multiplied by (ii) the number of Forward Purchase Contracts with respect to which the Holder has elected to effect Early Settlement, plus (B) if such delivery is made with respect to any Forward Purchase Contracts during the period from the close of business on any Record Date next preceding any Payment Date to the opening of business on such Payment Date, an amount equal to the Contract Adjustment Payments, if any, payable on such Payment Date with respect to such Forward Purchase Contracts; provided that no payment shall be required pursuant to clause (B) of this sentence if the Company shall have elected to defer the Contract Adjustment Payments that would otherwise be payable on such Payment Date and further provided that, at that time, if so required by the United States federal securities laws, a registration statement is in effect and a prospectus is available covering the shares of the Common Stock of the Company to be delivered in respect of the Forward Purchase Contracts being settled. Except as provided in the immediately preceding sentence and subject to Section 5.2(d), no 50 payment or adjustment shall be made upon Early Settlement of any Forward Purchase Contract on any Contract Adjustment Payments accrued on such Forward Purchase Contract or on account of any dividends on the Common Stock issued upon such Early Settlement. If the foregoing requirements are first satisfied with respect to Forward Purchase Contracts underlying any Equity Units or Stripped Units, as the case may be, at or prior to 5:00 p.m., New York City time, on a Business Day, such day shall be the "Early Settlement Date" with respect to such Equity Units or Stripped Units, as the case may be, and if such requirements are first satisfied after 5:00 p.m., New York City time, on a Business Day or on a day that is not a Business Day, the "Early Settlement Date" with respect to such Equity Units or Stripped Units, as the case may be, shall be the next succeeding Business Day. (b) Holders of Equity Units may settle only in units of 20 and integral multiples of 20. If a successful remarketing or a Tax Event Redemption has occurred, Holders of Stripped Units may effect Early Settlement pursuant to this Section 5.9 only in integral multiples of 32,000. (c) Upon Early Settlement of any Forward Purchase Contract by the Holder of the related Equity Units or Stripped Units, as the case may be, the Company shall issue, and the Holder shall be entitled to receive, 1.0187 shares of Common Stock for each Equity Unit or Stripped Unit on account of such Forward Purchase Contract (the "Early Settlement Rate"). The Early Settlement Rate shall be adjusted in the same manner and at the same time as the Settlement Rate is adjusted. As promptly as practicable after Early Settlement of Forward Purchase Contracts in accordance with the provisions of this Section 5.9, the Company shall issue and shall deliver to the Agent at the Corporate Trust Office a certificate or certificates or book entry interest for the full number of shares of Common Stock issuable upon such Early Settlement together with payment in lieu of any fraction of a share, as provided in Section 5.12. (d) No later than the third Business Day after the applicable Early Settlement Date the Company shall cause (i) the shares of Common Stock issuable upon Early Settlement of Forward Purchase Contracts to be issued and delivered, and (ii) the related Pledged Notes or Pledged Treasury Consideration or Pledged Applicable Ownership Interest in the Treasury Portfolio, in the case of Equity Units, or the related Pledged Treasury Securities, in the case of Stripped Units, to be released from the Pledge by the Collateral Agent and transferred, in each case, to the Agent for delivery to the Holder thereof or the Holder's designee. (e) Upon Early Settlement of any Forward Purchase Contracts, and subject to receipt of shares of Common Stock from the Company and the Pledged Notes, Pledged Treasury Consideration, Pledged Applicable Ownership Interest in the Treasury Portfolio, or Pledged Treasury Securities, as the case may be, from the Collateral Agent, as applicable, the Agent shall, in accordance with the instructions provided by the Holder thereof on the applicable form of Election to Settle Early on the reverse of the Certificate evidencing the related Equity Units or Stripped Units, as the case may be, (i) transfer to the Holder the Pledged Notes, Pledged Treasury Consideration, Pledged Applicable Ownership Interest in the Treasury Portfolio, or Pledged Treasury Securities, as the case 51 may be, forming a part of such Equity Units or Stripped Units, as the case may be, and (ii) deliver to the Holder a certificate or certificates or book-entry interest for the full number of shares of Common Stock issuable upon such Early Settlement together with payment in lieu of any fraction of a share, as provided in Section 5.12. (f) In the event that Early Settlement is effected with respect to Forward Purchase Contracts underlying less than all the Equity Units or Stripped Units, as the case may be, evidenced by a Certificate, upon such Early Settlement the Company shall execute and the Agent shall authenticate, execute on behalf of the Holder thereof and deliver to the Holder thereof, at the expense of the Company, a Certificate evidencing the Equity Units or Stripped Units, as the case may be, as to which Early Settlement was not effected. Section 5.10 Early Settlement Upon Merger. (a) In the event of a merger or consolidation of the Company of the type described in clause (1) of Section 5.6(b) in which the Common Stock outstanding immediately prior to such merger or consolidation is exchanged for consideration consisting of at least 30% cash or cash equivalents (any such event a "Cash Merger"), then the Company (or the successor to the Company hereunder) shall be required to offer the Holder of each Equity Unit or Stripped Unit, as the case may be, the right to settle the Forward Purchase Contract underlying such Equity Units or Stripped Units, as the case may be, prior to the Stock Purchase Date ("Merger Early Settlement") as provided herein. On or before the fifth Business Day after the consummation of a Cash Merger, the Company or, at the request and expense of the Company, the Agent, shall give all Holders notice of the occurrence of the Cash Merger and of the right of Merger Early Settlement arising as a result thereof. The Company shall also deliver a copy of such notice to the Agent and the Collateral Agent. Each such notice shall contain: (i) the date, which shall be not less than 20 nor more than 30 calendar days after the date of such notice, on which the Merger Early Settlement will be effected (the "Merger Early Settlement Date"); (ii) the date, which shall be on or one Business Day prior to the Merger Early Settlement Date, by which the Merger Early Settlement right must be exercised; (iii) the Settlement Rate in effect as a result of such Cash Merger and the kind and amount of securities, cash and other property receivable by the Holder upon settlement of each Forward Purchase Contract pursuant to Section 5.6(b); (iv) a statement to the effect that all or a portion of the Purchase Price payable by the Holder to settle the Forward Purchase Contract will be offset against the amount of cash so receivable upon exercise of Merger Early Settlement, as applicable; and (v) the instructions a Holder must follow to exercise the Merger Early Settlement right. 52 (b) To exercise a Merger Early Settlement right, a Holder shall deliver to the Agent at the Corporate Trust Office on or before 5:00 p.m., New York City time on the date specified in the notice the Certificate(s) evidencing the Equity Units or Stripped Units, as the case may be, with respect to which the Merger Early Settlement right is being exercised duly endorsed for transfer to the Company or in blank with the form of Election to Settle Early on the reverse thereof duly completed and accompanied by payment payable to the Company in immediately available funds in an amount equal to the Early Settlement Amount less the amount of cash that otherwise would be deliverable by the Company or its successor upon settlement of the Forward Purchase Contract in lieu of Common Stock pursuant to Section 5.4(b) and as described in the notice to Holders (the "Merger Early Settlement Amount"). (c) On the Merger Early Settlement Date, the Company shall deliver or cause to be delivered (i) the net cash, securities and other property to be received by such exercising Holder, equal to the Settlement Rate as adjusted pursuant to Section 5.6, in respect of the number of Forward Purchase Contracts for which such Merger Early Settlement right was exercised, and (ii) the related Pledged Notes, Pledged Treasury Consideration or Pledged Applicable Ownership Interest in the Treasury Portfolio, in the case of Equity Units, or Pledged Treasury Securities, in the case of Stripped Units, to be released from the Pledge by the Collateral Agent and transferred, in each case, to the Agent for delivery to the Holder thereof or its designee. In the event a Merger Early Settlement right shall be exercised by a Holder in accordance with the terms hereof, all references herein to the Stock Purchase Date shall be deemed to refer to such Merger Early Settlement Date. (d) Upon Merger Early Settlement of any Forward Purchase Contracts, and subject to receipt of such net cash, securities or other property from the Company and the Pledged Notes, Pledged Treasury Consideration, Pledged Applicable Ownership Interest in the Treasury Portfolio or Pledged Treasury Securities, as the case may be, from the Collateral Agent, as applicable, the Agent shall, in accordance with the instructions provided by the Holder thereof on the applicable form of Election to Settle Early on the reverse of the Certificate evidencing the related Equity Units or Stripped Units, as the case may be, (i) transfer to the Holder the Pledged Notes, Pledged Treasury Consideration, Pledged Applicable Ownership Interest in the Treasury Portfolio, or Pledged Treasury Securities, as the case may be, forming a part of such Equity Units or Stripped Units, as the case may be, and (ii) deliver to the Holder such net cash, securities or other property issuable upon such Merger Early Settlement together with payment in lieu of any fraction of a share, as provided in Section 5.12. (e) In the event that Merger Early Settlement is effected with respect to Forward Purchase Contracts underlying less than all the Equity Units or Stripped Units, as the case may be, evidenced by a Certificate, upon such Merger Early Settlement the Company (or the successor to the Company hereunder) shall execute and the Agent shall authenticate, execute on behalf of the Holder thereof and deliver to the Holder thereof, at the expense of the Company, a Certificate evidencing the Equity Units or Stripped Units, as the case may be, as to which Merger Early Settlement was not effected. Section 5.11 Charges and Taxes. 53 The Company will pay all stock transfer and similar taxes attributable to the initial issuance and delivery of the shares of Common Stock pursuant to the Forward Purchase Contracts; provided, that the Company shall not be required to pay any such tax or taxes which may be payable in respect of any exchange of or substitution for a Certificate evidencing Equity Units or Stripped Units or any issuance of a share of Common Stock in a name other than that of the registered Holder of a Certificate surrendered in respect of the Equity Units and Stripped Units evidenced thereby, other than in the name of the Agent, as custodian for such Holder, and the Company shall not be required to issue or deliver such share certificates or book-entry interest in Common Stock or Certificates unless and until the Person or Persons requesting the transfer or issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. Section 5.12 No Fractional Shares. No fractional shares or scrip representing fractional shares of Common Stock shall be issued or delivered upon settlement on the Stock Purchase Date or upon Early Settlement or Merger Early Settlement of any Forward Purchase Contracts. If Certificates evidencing more than one Forward Purchase Contract shall be surrendered for settlement at one time by the same Holder, the number of full shares of Common Stock which shall be delivered upon settlement shall be computed on the basis of the aggregate number of Forward Purchase Contracts evidenced by the Certificates so surrendered. Instead of any fractional share of Common Stock which would otherwise be deliverable upon settlement of any Forward Purchase Contracts on the applicable Settlement Date or upon Early Settlement or Merger Early Settlement, the Company, through the Agent, shall make a cash payment in respect of such fractional share in an amount equal to the value of such fractional share times the Applicable Market Value. The Company shall provide the Agent from time to time with sufficient funds to permit the Agent to make all cash payments required by this Section 5.12 in a timely manner. Section 5.13 Tax Treatment. The Company covenants and agrees and each Holder, by purchasing the Equity Units agrees, (i) to treat a Holder's acquisition of the Equity Units as the acquisition of the Note and Forward Purchase Contract constituting the Equity Units, (ii) to treat a Holder's acquisition of the Stripped Units as the acquisition of the Treasury Security and Forward Purchase Contract constituting the Stripped Unit, (iii) to treat each Holder as the owner of the related Notes, Treasury Consideration, Applicable Ownership Interest in the Treasury Portfolio or Treasury Securities, as the case may be and (iv) to allocate the purchase price of the Equity Unit between the Note and Forward Purchase Contract as $50 and $0, respectively. ARTICLE VI. REMEDIES Section 6.1 Unconditional Right of Holders to Purchase Common Stock. (a) The Holder of any Equity Units or Stripped Units, as the case may be shall have the right, which is absolute and unconditional, subject to the right of the Company to defer payment thereof pursuant to Section 5.3, and to the forfeiture of any Deferred Contract 54 Adjustment Payments upon Cash Settlement pursuant to Section 5.2(d), upon Early Settlement pursuant to Section 5.9(a), upon Merger Early Settlement pursuant to Section 5.10 or upon the occurrence of a Termination Event, to receive payment of each installment of the Contract Adjustment Payments, if any, with respect to the Purchase Contract constituting a part of such Equity Units or Stripped Units, as the case may be, on the respective Payment Date for such Equity Units or Stripped Units, as the case may be, and (b) Subject to Section 5.6, the Holder of any Units shall have the right, which is absolute and unconditional, to purchase Common Stock pursuant to the Forward Purchase Contract constituting a part of such Units and to institute suit for the enforcement of any such right to purchase Common Stock, and such right shall not be impaired without the consent of such Holder. Section 6.2 Restoration of Rights and Remedies. If any Holder has instituted any proceeding to enforce any right or remedy under this Agreement and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to such Holder, then and in every such case, subject to any determination in such proceeding, the Company and such Holder shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of such Holder shall continue as though no such proceeding had been instituted. Section 6.3 Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Certificates in Section 3.10(f), no right or remedy herein conferred upon or reserved to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. Section 6.4 Delay or Omission Not Waiver. No delay or omission of any Holder to exercise any right or remedy upon a default shall impair any such right or remedy or constitute a waiver of any such right. Every right and remedy given by this Article or by law to the Holders may be exercised from time to time, and as often as may be deemed expedient, by such Holders. Section 6.5 Undertaking For Costs. All parties to this Agreement agree, and each Holder of Equity Units or Stripped Units, as the case may be, by its acceptance of such Equity Units or Stripped Units, as the case may be, shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Agreement, or in any suit against the Agent for any action taken, suffered or omitted by it as Agent, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable 55 costs, including reasonable attorneys' fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided that the provisions of this Section shall not apply to any suit instituted by the Company, to any suit instituted by the Agent, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% of the Outstanding Units, or to any suit instituted by any Holder for the enforcement of distributions on any Notes or any Forward Purchase Contract on or after the respective Payment Date therefor in respect of any Equity Units or Stripped Units, as the case may be, held by such Holder, or for enforcement of the right to purchase shares of Common Stock under the Forward Purchase Contract constituting part of any Equity Units or Stripped Units, as the case may be, held by such Holder. Section 6.6 Waiver of Stay or Extension Laws. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants in or the performance of this Agreement; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, but will suffer and permit the execution of every power of the Agent and the Holders as though no such law had been enacted. ARTICLE VII. THE AGENT Section 7.1 Certain Duties, Rights and Immunities. (a) The Agent shall act as agent and attorney-in-fact for the Holders of the Equity Units and Stripped Units hereunder with such powers as are specifically vested in the Agent by the terms of this Agreement, the Pledge Agreement, the Remarketing Agreement, the Notes, the Equity Units and Stripped Units, and any documents evidencing them or related thereto (the "Transaction Documents"), together with such other powers as are reasonably incidental thereto. The Agent: (1) shall have no duties or responsibilities except those expressly set forth in the Transaction Documents and no implied covenants or obligations shall be inferred from any Transaction Documents against the Agent, nor shall the Agent be bound by the provisions of any agreement by any party hereto beyond the specific terms hereof; (2) shall be entitled to conclusively rely upon (x) any certificate, order, judgment, opinion, notice or other communication (including, without limitation, any thereof by telephone or facsimile) reasonably believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons (without being required to determine the correctness of any fact stated therein), (y) the truth of the statements and the correctness of the opinions expressed therein and (z) advice and statements of legal counsel and other experts selected by the 56 Agent; (3) shall in all cases be fully protected in acting, or in refraining from acting, hereunder or under any Transaction Documents in accordance with instructions given by the Company or the Holders in accordance herewith or with the Transaction Documents; (4) shall not be responsible for any recitals contained in any Transaction Document, or in any certificate or other document referred to or provided for in, or received by it under, any Transaction Document or the Equity Units or Stripped Units, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of any Transaction Document (other than as against the Agent) or the Equity Units or Stripped Units or any other document referred to or provided for herein or therein or for any failure by the Company, any Holder or any other Person (except the Agent) to perform any of its obligations hereunder or thereunder or for the perfection, priority or, except as expressly required hereby, existence, validity, perfection or maintenance of any security interest created under the Pledge Agreement, or for the use or application by the Company of the proceeds in respect of the Forward Purchase Contracts; (5) shall not be required to initiate or conduct any litigation or collection proceedings hereunder; (6) shall not be responsible for any action taken or omitted to be taken by it hereunder or under the Transaction Documents or any other document or instrument referred to or provided for herein or therein or in connection herewith or therewith, except for its own negligence, bad faith or willful misconduct; and (7) shall not be required to advise any party as to selling or retaining, or taking or refraining from taking any action with respect to, the Equity Units or Stripped Units or other rights under any Transaction Document. (b) No provision of any Transaction Document shall be construed to relieve the Agent from liability for its own negligent action, its own negligent failure to act, its own bad faith, or its own willful misconduct, except that: (1) this paragraph (b) shall not be construed to limit the effect of paragraph (a) of this Section; (2) the Agent shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Agent was grossly negligent in ascertaining the pertinent facts; and (3) in no event shall the Agent be required to expend or risk its own funds or otherwise incur any financial liability in the performance of any of 57 its duties hereunder. (c) In no event shall the Agent or its officers, employees or agents be liable for any special, indirect, individual, punitive or consequential loss or damages, lost profits or loss of business, arising in connection with any Transaction Document, whether or not the likelihood of such loss or damage was known to the Agent, and regardless of the form of action. (d) Whether or not therein expressly so provided, every provision of every Transaction Document relating to the conduct or affecting the liability of or affording protection to the Agent shall be subject to the provisions of this Section. (e) The Agent is authorized to execute and deliver the Pledge Agreement and the Remarketing Agreement and any supplement thereto in its capacity as Agent. The Agent shall be entitled to all of the rights, privileges, immunities and indemnities contained in this Agreement with respect to any duties of the Agent under, or actions taken, omitted to be taken or suffered by the Agent pursuant to the Pledge Agreement. (f) The Agent shall have no liability whatsoever for the action or inaction of any Clearing Agency or any book-entry system thereof. In no event shall any Clearing Agency or any book-entry system thereof be deemed an agent or subcustodian of the Agent. (g) The Agent shall not be responsible or liable for any failure or delay in the performance of its obligations under any Transaction Document arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of God; acts of terrorism; earthquakes; fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots; interruptions, loss or malfunctions of utilities, computer (hardware or software) or communications service; accidents; labor disputes; acts of civil or military authority; governmental actions; or inability to obtain labor, material, equipment or transportation. Section 7.2 Notice of Default. Within 30 days after the occurrence of any default by the Company of its obligations hereunder or under one or more Forward Purchase Contracts of which a Responsible Officer of the Agent has actual knowledge, the Agent shall transmit by mail to the Company and the Holders of Equity Units and Stripped Units, as their names and addresses appear in the Register, notice of such default hereunder, unless such default shall have been cured or waived. Section 7.3 Certain Rights of Agent. Subject to the provisions of Section 7.1: (a) the Agent may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; 58 (b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by an Officer's Certificate, Issuer Order or Issuer Request, and any resolution of the Board of Directors of the Company may be sufficiently evidenced by a Board Resolution; (c) whenever in the administration of this Agreement the Agent shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Agent (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officer's Certificate of the Company; (d) the Agent may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (e) the Agent shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Agent, in its discretion, may make reasonable further inquiry or investigation into such facts or matters related to the execution, delivery and performance of the Forward Purchase Contracts as it may see fit, and, if the Agent shall determine to make such further inquiry or investigation, it shall be given a reasonable opportunity to examine the books, records and premises of the Company, personally or by agent or attorney; (f) the Agent may execute any of the powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys or an Affiliate of the Agent and the Agent shall not be responsible for any misconduct or negligence on the part of any agent or attorney or an Affiliate appointed with due care by it hereunder; (g) the rights, privileges, protections, immunities and benefits given to the Agent, including, but not limited to, its right to be indemnified, are extended to, and shall be enforceable by, the Agent in each of its capacities hereunder, and to each custodian and other person employed to act hereunder; (h) the Agent shall not be charged with knowledge of any default by the Company hereunder unless a Responsible Officer of the Agent shall have received at the Corporate Trust Office of the Agent written notice of such default; and (i) the permissive right of the Agent to do things enumerated in this Agreement shall not be construed as a duty. Section 7.4 Not Responsible For Recitals, Etc. The recitals contained herein, in any other Transaction Documents and in the Certificates shall be taken as the statements of the Company and the Agent assumes no responsibility for their accuracy. The Agent makes no representations as to the validity or sufficiency of either this Agreement or any other Transaction Documents. The Agent shall not be accountable for the use or 59 application by the Company of the proceeds in respect of the Equity Units or Stripped Units or the Forward Purchase Contracts and shall not be responsible for the perfection, priority or maintenance of any security interests created or intended to be created under the Pledge Agreement. Section 7.5 May Hold Equity Units and Stripped Units and Other Dealings. Any Registrar or any other agent of the Company, or the Agent and its Affiliates, in their individual or any other capacity, may become the owner or pledgee of Equity Units or Stripped Units, as the case may be, and may otherwise deal with the Company, the Collateral Agent or any other Person with the same rights it would have if it were not Registrar or such other agent, or the Agent. The Agent and its Affiliates may (without having to account therefor to the Company or any Holder of Equity Units or Stripped Units or holder of Separate Notes) accept deposits from, lend money to, make other investments in and generally engage in any kind of banking, trust or other business with the Company, any Holder of Equity Units or Stripped Units and any holder of Separate Notes (and any of their respective subsidiaries or Affiliates) as if it were not acting as the Agent and the Agent and its Affiliates may accept fees and other consideration from the Company, any Holder of Equity Units or Stripped Units or any holder of Separate Notes without having to account for the same to any such Person. Section 7.6 Money Held In Custody. Money held by the Agent in custody hereunder need not be segregated from the Agent's other funds except to the extent required by law or provided herein. The Agent shall be under no obligation to invest or pay interest on any money received by it hereunder except as otherwise agreed in writing with the Company. Section 7.7 Compensation and Reimbursement. The Company agrees: (a) to pay to the Agent from time to time compensation for all services rendered by it hereunder or under the Transaction Documents as shall be agreed in writing between the Company and the Agent; (b) to reimburse the Agent upon its request for all reasonable expenses, disbursements and advances incurred or made by the Agent in accordance with any provision of this Agreement or the other Transaction Documents (including the reasonable compensation and the reasonable expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence, willful misconduct or bad faith; and (c) to indemnify the Agent for, and to hold it harmless against, any loss, liability or reasonable out-of-pocket expense incurred without gross negligence, willful misconduct or bad faith on its part, arising out of or in connection with the acceptance or administration of its duties under the other Transaction Documents, including the costs and expenses (including reasonable fees and expenses of counsel) of defending itself against any claim, whether asserted by the Company, a Holder or any other Person, or liability in connection 60 with the exercise or performance of any of its powers or duties under the Transaction Documents. The Agent shall promptly notify the Company of any third party claim which may give rise to the indemnity hereunder and give the Company the opportunity to participate in the defense of such claim with counsel reasonably satisfactory to the indemnified party, and no such claim shall be settled without the written consent of the Company, which consent shall not be unreasonably withheld, provided that any failure to give any such notice shall not affect the obligation of the Company under this Section. The provisions of this Section 7.7 shall survive the termination of any and all Transaction Documents, the satisfaction or discharge of the Equity Units or Stripped Units and/ or the Separate Notes or the resignation or removal of the Agent. Section 7.8 Corporate Agent Required; Eligibility. There shall at all times be an Agent hereunder which shall be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having (or being a member of a bank holding company having) a combined capital and surplus of at least $500,000,000, subject to supervision or examination by federal or state authority and having (or being a member of a bank holding company having) a Corporate Trust Office in the Borough of Manhattan, the City of New York, if there be such a corporation, qualified and eligible under this Article and willing to act on reasonable terms. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Agent shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. Section 7.9 Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Agent and no appointment of a successor Agent pursuant to this Article shall become effective until the acceptance of appointment by the successor Agent in accordance with the applicable requirements of Section 7.10. (b) The Agent may resign at any time by giving written notice thereof to the Company 60 days prior to the effective date of such resignation. If the instrument of acceptance by a successor Agent required by Section 7.10 shall not have been delivered to the Agent within 30 days after the giving of such notice of resignation, the resigning Agent may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Agent. (c) The Agent may be removed at any time by Act of the Holders of a majority in number of the Outstanding Units upon delivery of a written notice to the Agent and the Company. If the instrument of acceptance by a successor Agent required by Section 7.10 shall not have been delivered to the Agent within 30 days after the giving of such notice of removal, the Agent to be removed may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Agent. 61 (d) If at any time: (1) the Agent has a "conflicting interest" (as defined in Section 310(b) of the TIA) and fails to eliminate the conflicting interest or resign pursuant to Section 310(b) of the TIA upon written request therefor by the Company or by any Holder who has been a bona fide Holder of a Unit for at least six months, as if this Agreement were an indenture qualified under the TIA, as if the Equity Units or Stripped Units were in default and as if such default had not been cured or waived within the applicable period under Section 310(b) of the TIA; or (2) the Agent shall cease to be eligible under Section 7.8 and shall fail to resign after written request therefor by the Company or by any such Holder; or (3) the Agent shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Agent or of its property shall be appointed or any public officer shall take charge or control of the Agent or of its property or affairs for the purpose of rehabilitation, conservation or liquidation; then, in any such case, (x) the Company by a Board Resolution may remove the Agent, or (y) any Holder who has been a bona fide Holder of Equity Units or Stripped Equity Units for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Agent and the appointment of a successor Agent. (e) If the Agent shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Agent for any cause, the Company, by a Board Resolution, shall promptly appoint a successor Agent and shall comply with the applicable requirements of Section 7.10. If no successor Agent shall have been so appointed by the Company and accepted appointment in the manner required by Section 7.10, any Holder who has been a bona fide Holder of Equity Units or Stripped Equity Units for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Agent. (f) The Company shall give, or shall cause such successor Agent to give, notice of each resignation and each removal of the Agent and each appointment of a successor Agent by mailing written notice of such event by first-class mail, postage prepaid, to all Holders as their names and addresses appear in the applicable Register. Each notice shall include the name of the successor Agent and the address of its Corporate Trust Office. Section 7.10 Acceptance of Appointment By Successor. (a) In case of the appointment hereunder of a successor Agent, every such successor Agent so appointed shall execute, acknowledge and deliver to the Company and to the retiring Agent an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Agent shall become effective and such successor Agent, without any further act, deed or conveyance, shall become vested with all the rights, 62 powers, agencies, trusts and duties of the retiring Agent; but, on the request of the Company or the successor Agent, such retiring Agent shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Agent all the rights, powers, agencies, trusts and duties of the retiring Agent and duly assign, transfer and deliver to such successor Agent all property and money held by such retiring Agent hereunder. (b) Upon request of any such successor Agent, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Agent all such rights, powers, agencies, trusts and duties referred to in paragraph (a) of this Section. (c) No successor Agent shall accept its appointment unless at the time of such acceptance such successor Agent shall be qualified and eligible under this Article. Section 7.11 Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Agent shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Agent, shall be the successor of the Agent hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Certificates shall have been authenticated and executed on behalf of the Holders, but not delivered, by the Agent then in office, any successor by merger, conversion or consolidation to such Agent shall adopt such authentication and execution and deliver the Certificates so authenticated and executed with the same effect as if such successor Agent had itself authenticated and executed such Equity Units and Stripped Units. Section 7.12 Preservation of Information; Communications to Holders. (a) The Agent shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders received by the Agent in its capacity as Registrar. (b) If three or more Holders (herein referred to as "Applicants") apply in writing to the Agent, and furnish to the Agent reasonable proof that each such applicant has owned Equity Units or Stripped Units, as the case may be, for a period of at least six months preceding the date of such application, and such application states that the Applicants desire to communicate with other Holders with respect to their rights under this Agreement or under the Equity Units or Stripped Units, as the case may be, and is accompanied by a copy of the form of proxy or other communication which such Applicants propose to transmit, then the Agent shall mail to all the Holders copies of the form of proxy or other communication which is specified in such request, with reasonable promptness after a tender to the Agent of the materials to be mailed and of payment, or provision, in the absence of bad faith, satisfactory to the Agent for the payment, of the reasonable expenses of such mailing. Section 7.13 Failure to Act. 63 In the event of any ambiguity in the provisions of any Transaction Document or any dispute between or conflicting claims by or among the parties hereto or any other Person, the Agent shall be entitled, after prompt notice to the Company and the Holders of Equity Units and Stripped Units, at its sole option, to refuse to comply with any and all such claims, demands or instructions so long as such dispute or conflict shall continue, and the Agent shall not be or become liable in any way to any of the parties hereto for its failure or refusal to comply with such conflicting claims, demands or instructions. The Agent shall be entitled to refuse to act until either (i) such conflicting or adverse claims or demands shall have been finally determined by a court of competent jurisdiction or settled by agreement between the conflicting parties as evidenced in a writing, reasonably satisfactory to the Agent, or (ii) the Agent shall have received security or an indemnity reasonably satisfactory to the Agent sufficient to save the Agent harmless from and against any and all loss, liability or reasonable out-of-pocket expense which the Agent may incur by reason of its acting without bad faith, willful misconduct or gross negligence. The Agent may in addition elect to commence an interpleader action or seek other judicial relief or orders as the Agent may deem necessary. Notwithstanding anything contained herein to the contrary, the Agent shall not be required to take any action that is in its opinion contrary to law or to the terms of any Transaction Document, or which would in its opinion subject it or any of its officers, employees or directors to liability. Section 7.14 No Obligations of Agent. Except to the extent otherwise provided in this Agreement, the Agent assumes no obligation and shall not be subject to any liability under this Agreement, the Pledge Agreement or any Forward Purchase Contract in respect of the obligations of the Holder of any Equity Units or Stripped Units thereunder. The Company agrees, and each Holder of a Certificate, by such Holder's acceptance thereof, shall be deemed to have agreed, that the Agent's execution of the Certificates on behalf of the Holders shall be solely as agent and attorney-in-fact for the Holders, and that the Agent shall have no obligation to perform such Forward Purchase Contracts on behalf of the Holders, except to the extent expressly provided in Article V. Anything contained in this Agreement to the contrary notwithstanding, in no event shall the Agent or its officers, employees or agents be liable for indirect, special, punitive, or consequential loss or damage of any kind whatsoever, including, but not limited to, lost profits, whether or not the likelihood of such loss or damage was known to the Agent and regardless of the form of action. Section 7.15 Tax Compliance. (a) The Agent, on its own behalf and on behalf of the Company, will comply with all applicable certification, information reporting and withholding (including "backup" withholding) requirements imposed on it as a paying agent by applicable tax laws, regulations or administrative practice with respect to any payments made with respect to the Equity Units and Stripped Units. Such compliance shall include, without limitation, the preparation and timely filing of required returns and the timely payment of all amounts required to be withheld to the appropriate taxing authority or its designated agent. (b)The Agent shall comply with any reasonable written direction timely received from the Company with respect to the application of such requirements to particular 64 payments to Holders or in other particular circumstances, and may for purposes of this Agreement rely on any such direction in accordance with Section 7.1(a)(2). (c) The Agent shall maintain all appropriate records documenting compliance with such requirements, and shall make such records available, on written request, to the Company or its authorized representative within a reasonable period of time after receipt of such request. ARTICLE VIII. SUPPLEMENTAL AGREEMENTS Section 8.1 Supplemental Agreements Without Consent of Holders. Without the consent of any Holders, the Company and the Agent, at any time and from time to time, may enter into one or more agreements supplemental hereto, in form satisfactory to the Company and the Agent, for any of the following purposes: (a) to evidence the succession of another Person to the Company, and the assumption by any such successor of the covenants of the Company herein and in the Certificates; or (b) to add to the covenants of the Company for the benefit of the Holders, or to surrender any right or power herein conferred upon the Company; or (c) to evidence and provide for the acceptance of appointment hereunder by a successor Agent; or (d) to make provision with respect to the rights of Holders pursuant to the requirements of Section 5.6(b) or 5.10; or (e) to cure any ambiguity, to correct or supplement any provisions herein which may be inconsistent with any other provisions herein, or to make any other provisions with respect to such matters or questions arising under this Agreement, provided such action shall not adversely affect the interests of the Holders; or (f) to permit the substitution by Holders of designated Company debt instruments for the Pledged Notes as Collateral under this Agreement. Section 8.2 Supplemental Agreements With Consent of Holders. (a) With the consent of the Holders of not less than a majority of the outstanding Forward Purchase Contracts voting together as one class, by Act of said Holders delivered to the Company and the Agent, the Company, when authorized by a Board Resolution, and the Agent may enter into an agreement or agreements supplemental hereto, in form satisfactory to the Company and the Agent, for the purpose of modifying in any manner the terms of the Forward Purchase Contracts, or the provisions of this Agreement or the rights of the Holders in respect of the Equity Units and Stripped Units; provided, that, except as 65 contemplated herein, no such supplemental agreement shall, without the consent of the Holder of each Outstanding Unit affected thereby: (1) change any Payment Date; (2) change the amount or the type of Collateral required to be Pledged to secure a Holder's Obligations under the Forward Purchase Contract unless not adverse to Holders, impair the right of the Holder of any Forward Purchase Contract to receive distributions on the related Collateral (except as provided in Section 8.1(f) and except for the rights of Holders of Equity Units to substitute the Treasury Securities for the Pledged Notes, Pledged Treasury Consideration or Pledged Applicable Ownership Interest in the Treasury Portfolio, or the rights of holders of Stripped Units to substitute Notes or appropriate Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio for the Pledged Treasury Securities) or otherwise adversely affect the Holder's rights in or to such Collateral; (3) reduce any Contract Adjustment Payments, if any, or any Deferred Contract Adjustment Payment, or change any place where, or the coin or currency in which, any Contract Adjustment Payment is payable; (4) impair the right to institute suit for the enforcement of any Forward Purchase Contract, any Contract Adjustment Payment, if any, or any Deferred Contract Adjustment Payment, if any; (5) impair the right to institute suit for the enforcement of any Forward Purchase Contract; (6) reduce the number of shares of Common Stock to be purchased pursuant to any Forward Purchase Contract, increase the price to purchase shares of Common Stock upon settlement of any Forward Purchase Contract, change the Stock Purchase Date or otherwise materially adversely affect the Holder's rights under any Forward Purchase Contract; or (7) reduce the percentage of the outstanding Forward Purchase Contracts the consent of whose Holders is required for any such supplemental agreement; provided, that if any amendment or proposal referred to above would adversely affect only the Equity Units or the Stripped Units, then only the affected class of Holder as of the record date for the Holders entitled to vote thereon will be entitled to vote on such amendment or proposal, and such amendment or proposal shall not be effective except with the consent of Holders of not less than a majority or 100% of such class, as the case may be; provided further, however, that no agreement, whether with or without the consent of Holders shall affect Section 3.16. 66 (b) It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental agreement, but it shall be sufficient if such Act shall approve the substance thereof. Section 8.3 Execution of Supplemental Agreements. In executing, or accepting the additional agencies created by, any supplemental agreement permitted by this Article or the modifications thereby of the agencies created by this Agreement, the Agent shall be provided and (subject to Section 7.1) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental agreement is authorized or permitted by this Agreement. The Agent may, but shall not be obligated to, enter into any such supplemental agreement which affects the Agent's own rights, duties or immunities under this Agreement or otherwise. Section 8.4 Effect of Supplemental Agreements. Upon the execution of any supplemental agreement under this Article, this Agreement shall be modified in accordance therewith, and such supplemental agreement shall form a part of this Agreement for all purposes; and every Holder of Certificates theretofore or thereafter authenticated, executed on behalf of the Holders and delivered hereunder shall be bound thereby. Section 8.5 Reference to Supplemental Agreements. Certificates authenticated, executed on behalf of the Holders and delivered after the execution of any supplemental agreement pursuant to this Article may, and shall if required by the Agent, bear a notation in form approved by the Agent as to any matter provided for in such supplemental agreement. If the Company shall so determine, new Certificates so modified as to conform, in the opinion of the Agent and the Company, to any such supplemental agreement may be prepared and executed by the Company and authenticated, executed on behalf of the Holders and delivered by the Agent in exchange for outstanding Certificates. ARTICLE IX. CONSOLIDATION, MERGER, SALE OR CONVEYANCE Section 9.1 Company May Consolidate, Etc., Only on Certain Terms. The Company shall not consolidate with or merge into any other Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, unless: (a) the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance, transfer or lease the properties and assets of the Company substantially as an entirety shall be a corporation, partnership, limited liability company or trust, shall be organized and validly existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume every covenant of this Agreement, the Forward Purchase Contracts, the Notes, the Remarketing Agreement and the Pledge Agreement on the part of the Company to be performed or observed by one or more supplemental agreements in form reasonably 67 satisfactory to the Agent and the Collateral Agent, executed and delivered to the Agent and the Collateral Agent by such Person; (b) immediately after giving effect to such transaction, no default under this Agreement, the Forward Purchase Contracts, the Remarketing Agreement or the Pledge Agreement shall have happened and be continuing; and (c) the Company has delivered to the Agent an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and such supplemental agreement(s) comply with this Section 9.1 and that all conditions precedent herein provided for relating to such transaction have been complied with. This Section 9.1 shall not apply to any merger or consolidation in which the Company is the surviving corporation. Section 9.2 Successor Substituted. (a) Upon any consolidation with or merger of the Company into any other Person, or any conveyance, transfer or lease of the properties and assets of the Company substantially as an entirety in accordance with Section 9.1, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Agreement with the same effect as if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Agreement, the Forward Purchase Contracts, the Notes, the Units, the Remarketing Agreement and the Pledge Agreement. (b) In case of any such consolidation, merger, sale, assignment, transfer, lease or conveyance such change in phraseology and form (but not in substance) may be made in the Certificates evidencing Units thereafter to be issued as may be appropriate. ARTICLE X. COVENANTS Section 10.1 Performance Under Forward Purchase Contracts. The Company covenants and agrees for the benefit of the Holders from time to time of the Equity Units and Stripped Units that it will duly and punctually perform its obligations under the Forward Purchase Contracts in accordance with the terms of the Forward Purchase Contracts and this Agreement. In the case of Early Settlement pursuant to Section 5.9, if the United States federal securities laws so require, the Company will use commercially reasonable efforts to (i) have in effect a registration statement covering the shares of Common Stock to be delivered in respect of the Forward Purchase Contracts being settled and (ii) provide a prospectus in connection therewith, in each case that may be used in connection with such Early Settlement. Section 10.2 Maintenance of Office or Agency. 68 (a) The Company will maintain in the Borough of Manhattan, The City of New York an office or agency where Certificates may be presented or surrendered for payment of Contract Adjustment Payments, acquisition of shares of Common Stock upon settlement of the Forward Purchase Contracts on any Settlement Date and for transfer of Collateral upon occurrence of a Termination Event, where Certificates may be surrendered for registration of transfer or exchange, for a Collateral Substitution or reestablishment of Equity Units and where notices and demands to or upon the Company in respect of the Equity Units and Stripped Units and this Agreement may be served. The Company will give prompt written notice to the Agent of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Agent with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office, Office of the Agent in The City of New York, and the Company hereby appoints the Agent as its agent to receive all such presentations, surrenders, notices and demands. (b) The Company may also from time to time designate one or more other offices or agencies where Certificates may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, The City of New York for such purposes. The Company will give prompt written notice to the Agent of any such designation or rescission and of any change in the location of any such other office or agency. The Company hereby designates as the place of payment for the Equity Units and Stripped Units the Office of the Agent in The City of New York and appoints the Agent at the Office of the Agent in The City of New York as paying agent in such city. Section 10.3 Company to Reserve Common Stock. The Company shall at all times prior to the Stock Purchase Date reserve and keep available, free from preemptive rights, out of its authorized but unissued Common Stock the full number of shares of Common Stock issuable against tender of payment in respect of all Forward Purchase Contracts constituting a part of the Equity Units and Stripped Units evidenced by outstanding Certificates. Section 10.4 Covenants as to Common Stock. The Company covenants that all shares of Common Stock which may be issued against tender of payment in respect of any Forward Purchase Contract constituting a part of the Outstanding Units will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable. Section 10.5 Statements of Officer of the Company as to Default. The Company will deliver to the Agent, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officer's Certificate, stating whether or not to the best knowledge of the signer thereof the Company is in default in the performance and observance 69 of any of the terms, provisions and conditions hereof, and if the Company shall be in default, specifying all such defaults and the nature and status thereof of which such officer may have knowledge. Section 10.6 ERISA. Each Holder from time to time of the Equity Units or Stripped Units which is a Plan hereby represents that its acquisition of the Equity Units or Stripped Units and the holding of the same satisfies the applicable fiduciary requirements of ERISA and that it is entitled to exemption relief from the prohibited transaction provisions of ERISA and the Code in accordance with one or more prohibited transaction exemptions or otherwise will not result in a nonexempt prohibited transaction. [SIGNATURE PAGES FOLLOW] 70 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. AMERICAN ELECTRIC POWER COMPANY, INC. By: ______________________________ Name: Title: 71 THE BANK OF NEW YORK, as Forward Purchase Contract Agent By: ____________________________________ Name: Title: 72 EXHIBIT A FORM OF EQUITY UNITS CERTIFICATE [FOR INCLUSION IN GLOBAL CERTIFICATES ONLY -- THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE FORWARD PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE FORWARD PURCHASE CONTRACT AGREEMENT. Unless this Certificate is presented by an authorized representative of The Depository Trust Company (55 Water Street, New York, New York) to the Company or its agent for registration of transfer, exchange or payment, and any Certificate issued is registered in the name of Cede & Co., or such other name as requested by an authorized representative of The Depository Trust Company, and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.] (Form of Face of Equity Units Certificate) No. ______________ CUSIP No. ____________ Number of Equity Units____________ This Equity Units Certificate certifies that [For inclusion in Global Certificates only -- Cede & Co.] is the registered Holder of the number of Equity Units set forth above [For inclusion in Global Certificates only - or such other number of Equity Units reflected in the Schedule of Increases or Decreases in Global Certificates attached hereto]. Each Equity Unit represents (i) either (a) beneficial ownership by the Holder of one 5.75% Senior Note Due August 16, 2007 (the "Note") of American Electric Power Company, Inc., a New York corporation (the "Company") having a principal amount of $50, subject to the Pledge of such Note by such Holder pursuant to the Pledge Agreement, or (b) if the Note has been remarketed by the Remarketing Agent (or if the Holder has elected not to have the Note remarketed by delivering the Opt-out Treasury Consideration specified by the Remarketing Agent), the Agent-purchased Treasury Consideration, subject to the Pledge of such Treasury Consideration by such Holder pursuant to the Pledge Agreement, or (c) if a Tax Event Redemption has occurred, the Applicable Ownership Interest in the Treasury Portfolio subject to the Pledge of such Applicable Ownership Interest in the Treasury Portfolio pursuant to the Pledge Agreement, and (ii) the rights and obligations of the Holder under one Forward Purchase Contract with the Company. All capitalized terms used herein which are defined in the Forward Purchase Contract Agreement have the meaning set forth therein. Pursuant to the Pledge Agreement, the Note, the appropriate Treasury Consideration or the Applicable Ownership Interest in the Treasury Portfolio, as the case may be, constituting part of A-1 each Equity Unit evidenced hereby has been pledged to the Collateral Agent, for the benefit of the Company, to secure the obligations of the Holder under the Forward Purchase Contract comprising a part of such Equity Unit. The Pledge Agreement provides that all payments in respect of the Pledged Notes, Pledged Treasury Consideration or Pledged Applicable Ownership Interest in the Treasury Portfolio received by the Collateral Agent shall be paid by the Collateral Agent by wire transfer in same day funds (i) in the case of (A) quarterly cash distributions on Equity Units which include Pledged Notes, Pledged Treasury Consideration or Pledged Applicable Ownership Interest in the Treasury Portfolio and (B) any payments in respect of the Notes, Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio, as the case may be, that have been released from the Pledge pursuant to the Pledge Agreement, to the Agent to the account designated by the Agent, no later than 10:00 a.m., New York City time, on the Business Day such payment is received by the Collateral Agent (provided that in the event such payment is received by the Collateral Agent on a day that is not a Business Day or after 9:00 a.m., New York City time, on a Business Day, then such payment shall be made no later than 9:30 a.m., New York City time, on the next succeeding Business Day) and (ii) in the case of payments in respect of any Pledged Notes, Pledged Treasury Consideration or Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may be, to be paid upon settlement of such Holder's obligations to purchase Common Stock under the Forward Purchase Contract, to the Company on the Stock Purchase Date (as defined herein) in accordance with the terms of the Pledge Agreement, in full satisfaction of the respective obligations of the Holders of the Equity Units of which such Pledged Notes, Pledged Treasury Consideration or Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may be, are a part under the Forward Purchase Contracts forming a part of such Equity Units. Quarterly distributions on Equity Units which include Pledged Notes, Pledged Treasury Consideration or Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may be, which are payable quarterly in arrears on February 16, May 16, August 16 and November 16, each year, commencing August 16, 2002 (a "Payment Date"), shall, subject to receipt thereof by the Agent from the Collateral Agent (if the Collateral Agent is the registered owner thereof), be paid by the Agent to the Person in whose name this Equity Units Certificate (or a Predecessor Equity Units Certificate) is registered at the close of business on the Record Date for such Payment Date. Each Forward Purchase Contract evidenced hereby obligates the Holder of this Equity Units Certificate to purchase, and the Company to sell, on August 16, 2005 (the "Stock Purchase Date"), at a price equal to $50 (the "Stated Amount"), a number of newly issued shares of common stock, $6.50 par value per share ("Common Stock"), of the Company, equal to the Settlement Rate unless on or prior to the Stock Purchase Date there shall have occurred a Termination Event or a Cash Settlement, Early Settlement or Merger Early Settlement with respect to the Equity Units of which such Forward Purchase Contract is a part, all as provided in the Forward Purchase Contract Agreement and more fully described on the reverse hereof. The Purchase Price (as defined herein) for the shares of Common Stock purchased pursuant to each Forward Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the Stock Purchase Date by application of payments received in respect of the Pledged Notes, Pledged Treasury Consideration or Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may be, pledged to secure the obligations of the Holder under such Forward Purchase Contract in accordance with the terms of the Pledge Agreement. A-2 Payments on the Notes, the appropriate Treasury Consideration or the Applicable Ownership Interest in the Treasury Portfolio, as the case may be, will be payable at the Office of the Agent in The City of New York or, at the option of the Company, by check mailed to the address of the Person entitled thereto as such address appears on the Equity Units Register or by wire transfer to an account specified by such Person at least five Business Days prior to the applicable Payment Date. The Company shall pay on each Payment Date in respect of each Forward Purchase Contract forming part of an Equity Unit evidenced hereby an amount (the "Contract Adjustment Payment") equal to 3.50% per year of the Stated Amount, computed on the basis of a 360-day year of twelve 30-day months, subject to deferral at the option of the Company as provided in the Forward Purchase Contract Agreement and more fully described on the reverse hereof (provided that if any date on which a Contract Adjustment Payment is to be made on the Forward Purchase Contracts is not a Business Day, then payment of such Contract Adjustment Payment payable on such date will be made on the next succeeding day which is a Business Day, and no interest or payment will be paid in respect of such delay, except that if such next succeeding Business Day is in the next succeeding calendar year, then such payment will be made on the immediately preceding Business Day). Such Contract Adjustment Payments shall be payable to the Person in whose name this Equity Units Certificate (or a Predecessor Equity Units Certificate) is registered at the close of business on the Record Date for such Payment Date. Contract Adjustment Payments will be payable at the Office of the Agent in The City of New York or, at the option of the Company, by check mailed to the address of the Person entitled thereto as such address appears on the Equity Units Register or by wire transfer to the account designated to the Agent by a prior written notice by such Person delivered at least five Business Days prior to the applicable Payment Date. Reference is hereby made to the further provisions set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Agent by manual signature, this Equity Units Certificate shall not be entitled to any benefit under the Pledge Agreement or the Forward Purchase Contract Agreement or be valid or obligatory for any purpose. A-3 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. AMERICAN ELECTRIC POWER COMPANY, INC. By: _________________________________ Name: Title: A-4 HOLDER SPECIFIED ABOVE (as to obligations of such Holder under the Forward Purchase Contracts evidenced hereby) By: THE BANK OF NEW YORK, not individually but solely as Attorney-in-Fact of such Holder By: _____________________________________________ Authorized Signatory A-5 AGENT'S CERTIFICATE OF AUTHENTICATION This is one of the Equity Units Certificates referred to in the within-mentioned Forward Purchase Contract Agreement. THE BANK OF NEW YORK, as Forward Purchase Contract Agent Dated: June 11, 2002 By: _________________________________ Authorized Signatory A-6 (Form of Reverse of Equity Units Certificate) Each Forward Purchase Contract evidenced hereby is governed by a Forward Purchase Contract Agreement, dated as of June 11, 2002 (as may be supplemented from time to time, the "Forward Purchase Contract Agreement"), between the Company and The Bank of New York, as Forward Purchase Contract Agent (including its successors thereunder, herein called the "Agent"), to which Forward Purchase Contract Agreement and supplemental agreements thereto reference is hereby made for a description of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Agent, the Company, and the Holders and of the terms upon which the Equity Units Certificates are, and are to be, executed and delivered. Each Forward Purchase Contract evidenced hereby obligates the Holder of this Equity Units Certificate to purchase, and the Company to sell, on the Stock Purchase Date at a price equal to $50 (the "Purchase Price"), a number of shares of Common Stock of the Company equal to the Settlement Rate, unless, on or prior to the Stock Purchase Date, there shall have occurred a Termination Event or an Early Settlement, Merger Early Settlement or Cash Settlement with respect to the Units of which such Forward Purchase Contract is a part. The "Settlement Rate" is equal to (a) if the Applicable Market Value (as defined below) is greater than or equal to $49.08 (the "Threshold Appreciation Price"), 1.0187 shares of Common Stock per Forward Purchase Contract, (b) if the Applicable Market Value is less than the Threshold Appreciation Price but is greater than $40.90, the number of shares of Common Stock per Forward Purchase Contract equal to the Stated Amount of the related Equity Units divided by the Applicable Market Value and (c) if the Applicable Market Value is less than or equal to $40.90, 1.2225 shares of Common Stock per Forward Purchase Contract, in each case subject to adjustment as provided in the Forward Purchase Contract Agreement. No fractional shares of Common Stock will be issued upon settlement of Forward Purchase Contracts, as provided in the Forward Purchase Contract Agreement. The "Applicable Market Value" means the average of the Closing Price per share of Common Stock on each of the 20 consecutive Trading Days ending on the third Trading Day immediately preceding the Stock Purchase Date. The "Closing Price" of the Common Stock on any date of determination means the closing sale price (or, if no closing price is reported, the last reported sale price) of the Common Stock on the New York Stock Exchange (the "NYSE") on such date or, if the Common Stock is not listed for trading on the NYSE on any such date, as reported in the composite transactions for the principal United States securities exchange on which the Common Stock is so listed, or if the Common Stock is not so listed on a United States national or regional securities exchange, as reported by The NASDAQ Stock Market, or, if the Common Stock is not so reported, the last quoted bid price for the Common Stock in the over-the-counter market as reported by the National Quotation Bureau or similar organization, or, if such bid price is not available, the market value of the Common Stock on such date as determined by a nationally recognized independent investment banking firm retained for this purpose by the Company. A "Trading Day" means a day on which the Common Stock (A) is not suspended from trading on any national or regional securities exchange or association or over-the-counter market at the close of business and (B) has traded at least once on the national or regional securities A-7 exchange or association or over-the-counter market that is the primary market for the trading of the Common Stock. Each Forward Purchase Contract evidenced hereby may be settled prior to the Stock Purchase Date through Early Settlement or Merger Early Settlement, and may be settled on the Stock Purchase Date through Cash Settlement, all in accordance with the terms of the Forward Purchase Contract Agreement. In accordance with the terms of the Forward Purchase Contract Agreement, the Holder of this Equity Units Certificate shall pay the Purchase Price for the shares of Common Stock purchased pursuant to each Forward Purchase Contract evidenced hereby (i) by effecting a Cash Settlement, Early Settlement or Merger Early Settlement, (ii) by application of payments received in respect of the Pledged Treasury Consideration acquired from the proceeds of a remarketing of the related Pledged Notes underlying the Equity Units represented by this Equity Units Certificate, (iii) if the Holder has elected not to participate in the remarketing, by application of payments received in respect of the Pledged Treasury Consideration deposited by such Holder in respect of such Forward Purchase Contract, or (iv) if a Tax Event Redemption has occurred prior to the successful remarketing of the Notes, by application of payments received in respect of the Pledged Applicable Ownership Interest in the Treasury Portfolio purchased by the Collateral Agent on behalf of the Holder of this Equity Units Certificate. If, as provided in the Forward Purchase Contract Agreement, upon the occurrence of the Last Failed Remarketing, the Collateral Agent, for the benefit of the Company, exercises its rights as a secured creditor with respect to the Pledged Notes related to this Equity Units Certificate, any accrued and unpaid interest on such Pledged Notes will become payable by the Company to the Holder of this Equity Units Certificate in the manner provided for in the Forward Purchase Contract Agreement. The Company shall not be obligated to issue any shares of Common Stock in respect of a Forward Purchase Contract or deliver any certificates or book-entry interest therefor to the Holder unless it shall have received payment in full of the aggregate Purchase Price for the shares of Common Stock to be purchased thereunder in the manner herein set forth. Under the terms of the Pledge Agreement, the Agent will be entitled to exercise the voting and any other consensual rights pertaining to the Pledged Notes, but only to the extent instructed by the Holders as described below. Upon receipt of notice of any meeting at which holders of Notes are entitled to vote or upon the solicitation of consents, waivers or proxies of holders of Notes, the Agent shall, as soon as practicable thereafter, mail to the Holders of Equity Units a notice (a) containing such information as is contained in the notice or solicitation, (b) stating that each such Holder on the record date set by the Agent therefor (which, to the extent possible, shall be the same date as the record date for determining the holders of Notes entitled to vote) shall be entitled to instruct the Agent as to the exercise of the voting rights pertaining to the Pledged Notes constituting a part of such Holder's Equity Units and (c) stating the manner in which such instructions may be given. Upon the written request of the Holders of Equity Units on such record date, the Agent shall endeavor insofar as practicable to vote or cause to be voted, in accordance with the instructions set forth in such requests, the maximum number of Pledged Notes as to which any particular voting instructions are received. In the absence of specific instructions from the Holder of an Equity Unit, the Agent shall abstain from voting the Pledged Note evidenced by such Equity Units. A-8 The Equity Units Certificates are issuable only in registered form and only in denominations of a single Equity Unit and any integral multiple thereof. The transfer of any Equity Units Certificate will be registered and Equity Units Certificates may be exchanged as provided in the Forward Purchase Contract Agreement. The Equity Units Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents permitted by the Forward Purchase Contract Agreement. No service charge shall be required for any such registration of transfer or exchange, but the Company and the Agent may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Holder of an Equity Units may substitute for the Pledged Notes securing its obligations under the related Forward Purchase Contract Treasury Securities in accordance with the terms of the Forward Purchase Contract Agreement and the Pledge Agreement. From and after such Collateral Substitution, the Units for which such Pledged Treasury Securities secure the Holder's obligation under the Forward Purchase Contract shall be referred to as a "Stripped Unit." A Holder that elects to substitute a Treasury Security for Pledged Notes thereby creating Stripped Units, shall be responsible for any fees or expenses payable in connection therewith. Except as provided in the Forward Purchase Contract Agreement, for so long as the Forward Purchase Contract underlying an Equity Unit remains in effect, such Equity Unit shall not be separable into its constituent parts, and the rights and obligations of the Holder of such Equity Unit in respect of the Pledged Note and Forward Purchase Contract constituting such Equity Unit may be transferred and exchanged only as an Equity Unit. A Holder of Stripped Units may reestablish Equity Units by delivering to the Collateral Agent Notes in exchange for the release of the Pledged Treasury Securities in accordance with the terms of the Forward Purchase Contract Agreement and the Pledge Agreement. Subject to the next succeeding paragraph, the Company shall pay on each Payment Date, the Contract Adjustment Payments, if any, payable in respect of each Forward Purchase Contract to the Person in whose name the Equity Units Certificate evidencing such Forward Purchase Contract is registered at the close of business on the Record Date for such Payment Date. Contract Adjustment Payments, if any, will be payable at the office of the Agent in the City of New York or, at the option of the Company, by check mailed to the address of the Person entitled thereto at such address as it appears on the Equity Units Register or by wire transfer to the account designated by such Person in writing at least five Business Days prior to the applicable Payment Date. The Company shall have the right, at any time prior to the Stock Purchase Date, to defer the payment of any or all of the Contract Adjustment Payments otherwise payable on any Payment Date, but only if the Company shall give the Holders and the Agent written notice of its election to defer Contract Adjustment Payments as provided in the Forward Purchase Contract Agreement. Any Contract Adjustment Payments so deferred shall, to the extent permitted by law, bear additional Contract Adjustment Payments thereon at the rate of 5.75% per year (computed on the basis of a 360-day year of twelve 30-day months), compounding on each succeeding Payment Date, until paid in full (such deferred installments of Contract Adjustment Payments, if any, together with the additional Contract Adjustment Payments, if any, accrued thereon, are referred to herein as the "Deferred Contract Adjustment Payments"). Deferred Contract Adjustment Payments, if any, shall be due on the next succeeding Payment Date except to the extent that payment is deferred pursuant to the Forward Purchase Contract Agreement. No Contract Adjustment Payments may be deferred to a date that is after the Stock Purchase Date and no such A-9 deferral period may end other than on a Payment Date. In the event that the Company elects to defer the payment of Contract Adjustment Payments on the Forward Purchase Contracts until a Payment Date prior to the Stock Purchase Date, then all Deferred Contract Adjustment Payments, if any, shall be payable to the registered Holders as of the close of business on the Record Date immediately preceding such Payment Date. In the event the Company exercises its option to defer the payment of Contract Adjustment Payments, then, until the Deferred Contract Adjustment Payments have been paid, the Company shall not declare or pay dividends on, make distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, any of its Common Stock other than (i) purchases, redemptions or acquisitions of shares of Common Stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers or directors or a stock purchase or dividend reinvestment plan, or the satisfaction by the Company of its obligations pursuant to any contract or security outstanding on the date the Company exercises its rights to defer the Contract Adjustment Payments; (ii) as a result of a reclassification of the Company's Capital Stock or the exchange or conversion of one class or series of for another class or series of the Company's Capital Stock; (iii) the purchase of fractional interests in shares of any series of the Company's Common Stock pursuant to the conversion or exchange provisions of such Common Stock or the security being converted or exchanged; (iv) dividends or distributions in any series of the Company's Common Stock (or rights to acquire Common Stock) or repurchases, acquisitions or redemptions of Common Stock in connection with the issuance or exchange of any series of Common Stock (or securities convertible into or exchangeable for shares of the Company's Common Stock); or (v) redemptions, exchanges or repurchases of any rights outstanding under a shareholder rights plan or the declaration or payment thereunder of a dividend or distribution of or with respect to rights in the future. The Forward Purchase Contracts and all obligations and rights of the Company and the Holders thereunder, including, without limitation, the rights and obligations of the Holders to receive and the obligation of the Company to pay Contract Adjustment Payments, if any, or any Deferred Contract Adjustment Payments, and the rights of the Holders to purchase Common Stock, shall immediately and automatically terminate, without the necessity of any notice or action by any Holder, the Agent or the Company, if, on or prior to the Stock Purchase Date, a Termination Event shall have occurred. Upon the occurrence of a Termination Event, the Company shall promptly but in no event later than two Business Days thereafter give written notice to the Agent, the Collateral Agent and to the Holders, at their addresses as they appear in the Equity Units Register. Upon and after the occurrence of a Termination Event, the Collateral Agent shall release the Pledged Notes, Pledged Treasury Consideration or Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may be, from the Pledge in accordance with the provisions of the Pledge Agreement. Upon registration of transfer of this Equity Units Certificate, the transferee shall be bound (without the necessity of any other action on the part of such transferee, except as may be required by the Agent pursuant to the Forward Purchase Contract Agreement), by the terms of the Forward Purchase Contract Agreement and the Forward Purchase Contracts evidenced hereby and the transferor shall be released from the obligations under the Forward Purchase Contracts evidenced A-10 by this Equity Units Certificate. The Company covenants and agrees, and the Holder, by its acceptance hereof, likewise covenants and agrees, to be bound by the provisions of this paragraph. The Holder of this Equity Units Certificate, by its acceptance hereof, authorizes the Agent to enter into and perform the related Forward Purchase Contracts forming part of the Equity Units evidenced hereby on its behalf as its attorney-in-fact, expressly withholds any consent to the assumption (i.e., affirmance) of the Forward Purchase Contracts by the Company or its trustee in the event that the Company becomes the subject of a case under the Bankruptcy Code, agrees to be bound by the terms and provisions of the Forward Purchase Contracts, covenants and agrees to perform such Holder's obligations under such Forward Purchase Contracts, consents to the provisions of the Forward Purchase Contract Agreement, irrevocably authorizes the Agent to enter into and perform the Pledge Agreement on such Holder's behalf as attorney-in-fact, and consents to and agrees to be bound by the Pledge of the Notes or the appropriate Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio, as the case may be, underlying this Equity Units Certificate pursuant to the Pledge Agreement, provided, that upon a Termination Event, the rights of the Holder of such Units under the Forward Purchase Contract may be enforced without regard to any other rights or obligations. The Holder further covenants and agrees, that, to the extent and in the manner provided in the Forward Purchase Contract Agreement and the Pledge Agreement, but subject to the terms thereof, payments in respect of the Pledged Notes, Pledged Treasury Consideration or Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may be, to be paid upon settlement of such Holder's obligations to purchase Common Stock under the Forward Purchase Contract, shall be paid on the Stock Purchase Date by the Collateral Agent to the Company in satisfaction of such Holder's obligations under such Forward Purchase Contract and such Holder shall acquire no right, title or interest in such payments. The Company and each Holder of an Equity Unit, and each Beneficial Owner thereof, by its acceptance thereof or of its interest therein, further agrees to treat (i) the purchase of Equity Units as the purchase of a unit consisting of the Forward Purchase Contract and the Note and to allocate the purchase price of the Equity Unit between the Note and the Forward Purchase Contract as $50 and $0, respectively, and (ii) the holder as the owner of the applicable interest in the Collateral Account, including the related Notes, Treasury Consideration or Applicable Ownership Interest in the Treasury Portfolio, as the case may be. Subject to certain exceptions, the provisions of the Forward Purchase Contract Agreement may be amended with the consent of the Holders of a majority of the Forward Purchase Contracts. The Forward Purchase Contracts shall for all purposes be governed by, and construed in accordance with, the laws of the State of New York, without regard to its principles of conflicts of laws. The Company, the Agent and any agent of the Company or the Agent may treat the Person in whose name this Equity Units Certificate is registered as the owner of the Equity Units evidenced hereby for the purpose of receiving quarterly payments on the Notes, the Treasury Consideration or the Applicable Ownership Interest in the Treasury Portfolio, as the case may be, receiving payments of Contract Adjustment Payments, if any, and any Deferred Contract Adjustment Payments, performance of the Forward Purchase Contracts and for all other purposes A-11 whatsoever (subject to the Record Date provisions hereof), whether or not any payments in respect thereof be overdue and notwithstanding any notice to the contrary, and neither the Company, the Agent, nor any such agent shall be affected by notice to the contrary. The Forward Purchase Contracts shall not, prior to the settlement thereof, entitle the Holder to any of the rights of a holder of shares of Common Stock. A copy of the Forward Purchase Contract Agreement is available for inspection by any Holder at the Corporate Trust Office. A-12 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian (cust) (minor) Under Uniform Gifts to Minors Act (State) TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list. A-13 ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto (Please insert Social Security or Taxpayer I.D. or other Identifying Number of Assignee) (Please Print or Type Name and Address Including Postal Zip Code of Assignee) the within Equity Units Certificate and all rights thereunder, hereby irrevocably constituting and appointing ___________________________ attorney to transfer said Equity Units Certificate on the books of American Electric Power Company, Inc. with full power of substitution in the premises. Dated: _________________________ Signature: _____________________________ NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Equity Units Certificate in every particular, without alteration or enlargement or any change whatsoever. Signature Guarantee: ___________________________. A-14 SETTLEMENT INSTRUCTIONS The undersigned Holder directs that a certificate or book-entry interest for shares of Common Stock deliverable upon settlement on or after the Stock Purchase Date of the Forward Purchase Contracts underlying the number of Equity Units evidenced by this Equity Units Certificate be registered in the name of, and delivered, together with a check in payment for any fractional share, to the undersigned at the address indicated below unless a different name and address have been indicated below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto. Dated: ______________________ Signature: _____________________________ Signature Guarantee: ___________________ (if assigned to another person) If shares are to be registered in REGISTERED HOLDER the name of and delivered to a Person other than the Holder, please (i) Please print name and address of print such Person's name and address Registered Holder: and (ii) provide a guarantee of your signature: Name Name Address Address Social Security or other Taxpayer Identification Number, if any A-15 ELECTION TO SETTLE EARLY The undersigned Holder of this Equity Units Certificate hereby irrevocably exercises the option to effect Early Settlement in accordance with the terms of the Forward Purchase Contract Agreement with respect to the Forward Purchase Contracts underlying the number of Equity Units evidenced by this Equity Units Certificate specified below. The option to effect Early Settlement may be exercised only with respect to Forward Purchase Contracts underlying Equity Units with an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The undersigned Holder directs that a certificate or book-entry interest for shares of Common Stock deliverable upon such Early Settlement be registered in the name of, and delivered, together with a check in payment for any fractional share and any Equity Units Certificate representing any Equity Units evidenced hereby as to which Early Settlement of the related Forward Purchase Contracts is not effected, to the undersigned at the address indicated below unless a different name and address have been indicated below. The Pledged Notes, Pledged Treasury Consideration or Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may be, deliverable upon such Early Settlement will be transferred in accordance with the transfer instructions set forth below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto. Dated: ____________________ Signature: _____________________________ Signature Guarantee: ___________________ Number of Units evidenced hereby as to which Early Settlement of the related Forward Purchase Contracts is being elected: If shares of Common Stock are REGISTERED HOLDER to be registered in the name of and delivered to and Pledged Notes, Please print name and address of Pledged Treasury Consideration or Registered Holder: Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may be, are to be transferred to a Person other than the Holder, please print such Person's name and address: Name Name Address Address Social Security or other Taxpayer Identification Number, if any Transfer instructions for Pledged Notes, Pledged Treasury Consideration or the Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may be, transferable upon Early Settlement or a Termination Event: A-16 (TO BE ATTACHED TO GLOBAL CERTIFICATES) SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE The following increases or decreases in this Global Certificate have been made: Stated Amount of the Global Amount of Decrease in Certificate Decrease in Stated Increase in Stated Following Such Signature of Amount of the Amount of the Decrease or Authorized Date Global Certificate Global Certificate Increase Signatory A-17 EXHIBIT B FORM OF STRIPPED UNITS CERTIFICATE [FOR INCLUSION IN GLOBAL CERTIFICATES ONLY -- THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE FORWARD PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE NAME OF A CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE FORWARD PURCHASE CONTRACT AGREEMENT. Unless this Certificate is presented by an authorized representative of The Depository Trust Company (55 Water Street, New York, New York) to the Company or its agent for registration of transfer, exchange or payment, and any Certificate issued is registered in the name of Cede & Co., or such other name as requested by an authorized representative of The Depository Trust Company, and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.] (Form of Face of Stripped Units Certificate) No. CUSIP No. ____________ Number of Stripped Units This Stripped Units Certificate certifies that [For inclusion in Global Certificates only -- Cede & Co.] is the registered Holder of the number of Stripped Units set forth above [For inclusion in Global Certificates only - or such other number of Stripped Units reflected in the Schedule of Increases or Decreases in Global Certificate attached hereto]. Each Stripped Unit represents (i) a 1/20 undivided beneficial ownership interest in a Treasury Security, subject to the Pledge of such interest in such Treasury Security by such Holder pursuant to the Pledge Agreement, and (ii) the rights and obligations of the Holder under one Forward Purchase Contract with American Electric Power Company, Inc., a New York corporation (the "Company"). All capitalized terms used herein which are defined in the Forward Purchase Contract Agreement have the meaning set forth therein. Pursuant to the Pledge Agreement, the Treasury Security constituting part of each Stripped Unit evidenced hereby has been pledged to the Collateral Agent, for the benefit of the Company, to secure the obligations of the Holder under the Forward Purchase Contract comprising a part of such Stripped Units. Each Forward Purchase Contract evidenced hereby obligates the Holder of this Stripped Units Certificate to purchase, and the Company to sell, on the Stock Purchase Date, at a price equal to $50 (the "Stated Amount"), a number of shares of common stock, $6.50 par value per share B-1 ("Common Stock"), of the Company, equal to the Settlement Rate, unless on or prior to the Stock Purchase Date there shall have occurred a Termination Event or an Early Settlement, Merger Early Settlement or Cash Settlement with respect to the Stripped Units of which such Forward Purchase Contract is a part, all as provided in the Forward Purchase Contract Agreement and more fully described on the reverse hereof. The Purchase Price (as defined herein) for the shares of Common Stock purchased pursuant to each Forward Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the Stock Purchase Date by application of payments received in respect of the Pledged Treasury Securities pledged to secure the obligations under such Forward Purchase Contract in accordance with the terms of the Pledge Agreement. The Company shall pay on each Payment Date in respect of each Forward Purchase Contract forming part of a Stripped Units evidenced hereby an amount (the "Contract Adjustment Payments") equal to 3.50% per year of the Stated Amount, computed on the basis of a 360-day year of twelve 30-day months, subject to deferral at the option of the Company as provided in the Forward Purchase Contract Agreement and more fully described on the reverse hereof (provided that if any date on which Contract Adjustment Payments are to be made on the Forward Purchase Contracts is not a Business Day, then payment of the Contract Adjustment Payments payable on that date will be made on the next succeeding day which is a Business Day, and no interest or payment will be paid in respect of the delay, except that if such next succeeding Business Day is in the next succeeding calendar year, such payment will be made on the immediately preceding Business Day). Such Contract Adjustment Payments shall be payable to the Person in whose name this Stripped Units Certificate (or a Predecessor Stripped Units Certificate) is registered at the close of business on the Record Date for such Payment Date. Contract Adjustment Payments, if any, will be payable at the Office of the Agent in the City of New York or, at the option of the Company, by check mailed to the address of the Person entitled thereto at such address as it appears on the Stripped Units Register or by wire transfer to the account designated by such Person in writing at least five Business Days prior to the applicable Payment Date. Reference is hereby made to the further provisions set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Agent by manual signature, this Stripped Units Certificate shall not be entitled to any benefit under the Pledge Agreement or the Forward Purchase Contract Agreement or be valid or obligatory for any purpose. B-2 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. AMERICAN ELECTRIC POWER COMPANY, INC. By: ____________________________________ Name: Title: HOLDER SPECIFIED ABOVE (as to obligations of such Holder under the Forward Purchase Contracts) By: THE BANK OF NEW YORK, not individually but solely as Attorney-in-Fact of such Holder By: ____________________________________ Authorized Signatory B-3 AGENT'S CERTIFICATE OF AUTHENTICATION This is one of the Stripped Units referred to in the within-mentioned Forward Purchase Contract Agreement. THE BANK OF NEW YORK, as Forward Purchase Contract Agent Dated: June 11, 2002 By:_______________________________________ Authorized Signatory B-4 (Reverse of Stripped Units Certificate) Each Forward Purchase Contract evidenced hereby is governed by a Forward Purchase Contract Agreement, dated as of June 11, 2002 (as may be supplemented from time to time, the "Forward Purchase Contract Agreement"), between the Company and The Bank of New York, as Forward Purchase Contract Agent (including its successors thereunder, herein called the "Agent"), to which Forward Purchase Contract Agreement and supplemental agreements thereto reference is hereby made for a description of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Agent, the Company and the Holders and of the terms upon which the Stripped Units Certificates are, and are to be, executed and delivered. Each Forward Purchase Contract evidenced hereby obligates the Holder of this Stripped Units Certificate to purchase, and the Company to sell, on the Stock Purchase Date at a price equal to $50 (the "Purchase Price"), a number of shares of Common Stock of the Company equal to the Settlement Rate, unless, on or prior to the Stock Purchase Date, there shall have occurred a Termination Event or an Early Settlement or Merger Early Settlement with respect to the Stripped Units of which such Forward Purchase Contract is a part. The "Settlement Rate" is equal to (a) if the Applicable Market Value (as defined below) is greater than or equal to $49.08 (the "Threshold Appreciation Price"), 1.0187 shares of Common Stock per Forward Purchase Contract, (b) if the Applicable Market Value is less than the Threshold Appreciation Price but is greater than $40.90, the number of shares of Common Stock per Forward Purchase Contract equal to the Stated Amount of the related Stripped Units divided by the Applicable Market Value and (c) if the Applicable Market Value is less than or equal $40.90, 1.2225 shares of Common Stock per Forward Purchase Contract, in each case subject to adjustment as provided in the Forward Purchase Contract Agreement. No fractional shares of Common Stock will be issued upon settlement of Forward Purchase Contracts, as provided in the Forward Purchase Contract Agreement. The "Applicable Market Value" means the average of the Closing Price per share of Common Stock on each of the 20 consecutive Trading Days ending on the third Trading Day immediately preceding the Stock Purchase Date. The "Closing Price" of the Common Stock on any date of determination means the closing sale price (or, if no closing price is reported, the last reported sale price) of the Common Stock on the New York Stock Exchange (the "NYSE") on such date or, if the Common Stock is not listed for trading on the NYSE on any such date, as reported in the composite transactions for the principal United States securities exchange on which the Common Stock is so listed, or if the Common Stock is not so listed on a United States national or regional securities exchange, as reported by The NASDAQ Stock Market, or, if the Common Stock is not so reported, the last quoted bid price for the Common Stock in the over-the-counter market as reported by the National Quotation Bureau or similar organization, or, if such bid price is not available, the market value of the Common Stock on such date as determined by a nationally recognized independent investment banking firm retained for this purpose by the Company. A "Trading Day" means a day on which the Common Stock (A) is not suspended from trading on any national or regional securities exchange or association or over-the-counter market at the close of business and (B) has traded at least once on the national or regional securities B-5 exchange or association or over-the-counter market that is the primary market for the trading of the Common Stock. Each Forward Purchase Contract evidenced hereby may be settled prior to the Stock Purchase Date through Early Settlement or Merger Early Settlement, and may be settled on the Stock Purchase Date through Cash Settlement, all in accordance with the terms of the Forward Purchase Contract Agreement. In accordance with the terms of the Forward Purchase Contract Agreement, the Holder of this Stripped Units Certificate shall pay the Purchase Price for the shares of Common Stock purchased pursuant to each Forward Purchase Contract evidenced hereby (i) by effecting an Early Settlement, Merger Early Settlement or Cash Settlement or (ii) by application of payments received in respect of the Pledged Treasury Securities underlying the Stripped Units represented by this Stripped Units Certificate. The Company shall not be obligated to issue any shares of Common Stock in respect of a Forward Purchase Contract or deliver any certificates or book-entry interest therefor to the Holder unless it shall have received payment in full of the aggregate Purchase Price for the shares of Common Stock to be purchased thereunder in the manner herein set forth. The Stripped Units Certificates are issuable only in registered form and only in denominations of a single Stripped Units and any integral multiple thereof. The transfer of any Stripped Units Certificate will be registered and Stripped Units Certificates may be exchanged as provided in the Forward Purchase Contract Agreement. The Stripped Units Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents permitted by the Forward Purchase Contract Agreement. No service charge shall be required for any such registration of transfer or exchange, but the Company and the Agent may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Holder of a Stripped Unit may substitute for the Pledged Treasury Securities securing its obligations under the related Forward Purchase Contract Notes in accordance with the terms of the Forward Purchase Contract Agreement and the Pledge Agreement. From and after such substitution, the Units for which such Pledged Notes secure the Holder's obligation under the Forward Purchase Contract shall be referred to as an "Equity Unit." A Holder that elects to substitute Notes for Pledged Treasury Securities, thereby reestablishing Equity Units, shall be responsible for any fees or expenses payable in connection therewith. Except as provided in the Forward Purchase Contract Agreement, for so long as the Forward Purchase Contract underlying a Stripped Unit remains in effect, such Stripped Units shall not be separable into its constituent parts, and the rights and obligations of the Holder of such Stripped Units in respect of the Pledged Treasury Security and the Forward Purchase Contract constituting such Stripped Units may be transferred and exchanged only as a Stripped Unit. Subject to the next succeeding paragraph, the Company shall pay on each Payment Date, the Contract Adjustment Payments, if any, payable in respect of each Forward Purchase Contract to the Person in whose name the Stripped Units Certificate evidencing such Forward Purchase Contract is registered at the close of business on the Record Date for such Payment Date. Contract Adjustment Payments, if any, will be payable at the Office of the Agent in the City of New York or, at the option of the Company, by check mailed to the address of the Person entitled thereto at B-6 such address as it appears on the Stripped Units Register or by wire transfer to the account designated by such Person in writing at least five Business Days prior to the applicable Payment Date. The Company shall have the right, at any time prior to the Stock Purchase Date, to defer the payment of any or all of the Contract Adjustment Payments otherwise payable on any Payment Date, but only if the Company shall give the Holders and the Agent written notice of its election to defer Contract Adjustment Payments as provided in the Forward Purchase Contract Agreement. Any Contract Adjustment Payments so deferred shall, to the extent permitted by law, bear additional Contract Adjustment Payments thereon at the rate of 5.75% per year (computed on the basis of a 360-day year of twelve 30-day months), compounding on each succeeding Payment Date, until paid in full (such deferred installments of Contract Adjustment Payments, if any, together with the additional Contract Adjustment Payments, if any, accrued thereon, are referred to herein as the "Deferred Contract Adjustment Payments"). Deferred Contract Adjustment Payments, if any, shall be due on the next succeeding Payment Date except to the extent that payment is deferred pursuant to the Forward Purchase Contract Agreement. No Contract Adjustment Payments may be deferred to a date that is after the Stock Purchase Date and no such deferral period may end other than on a Payment Date. In the event that the Company elects to defer the payment of Contract Adjustment Payments on the Forward Purchase Contracts until a Payment Date prior to the Stock Purchase Date, then all Deferred Contract Adjustment Payments, if any, shall be payable to the registered Holders as of the close of business on the Record Date immediately preceding such Payment Date. In the event the Company exercises its option to defer the payment of Contract Adjustment Payments, then, until the Deferred Contract Adjustment Payments have been paid, the Company shall not declare or pay dividends on, make distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, any of its Common Stock other than (i) purchases, redemptions or acquisitions of shares of Common Stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers or directors or a stock purchase or dividend reinvestment plan, or the satisfaction by the Company of its obligations pursuant to any contract or security outstanding on the date the Company exercises its rights to defer the Contract Adjustment Payments; (ii) as a result of a reclassification of the Company's Capital Stock or the exchange or conversion of one class or series of the Company's Capital Stock for another class or series of the Company's Capital Stock; (iii) the purchase of fractional interests in shares of any series of the Company's Common Stock pursuant to the conversion or exchange provisions of such Common Stock or the security being converted or exchanged; (iv) dividends or distributions in any series of the Company's Common Stock (or rights to acquire Common Stock) or repurchases, acquisitions or redemptions of Common Stock in connection with the issuance or exchange of any series of Common Stock (or securities convertible into or exchangeable for shares of the Company's Common Stock; or (v) redemptions, exchanges or repurchases of any rights outstanding under a shareholder rights plan or the declaration or payment thereunder of a dividend or distribution of or with respect to rights in the future. The Forward Purchase Contracts and all obligations and rights of the Company and the Holders thereunder, including, without limitation, the rights and obligations of Holders to receive B-7 and the obligation of the Company to pay Contract Adjustment Payments, if any, or any Deferred Contract Adjustment Payments, and the rights and obligations of Holders to purchase Common Stock, shall immediately and automatically terminate, without the necessity of any notice or action by any Holder, the Agent or the Company, if, on or prior to the Stock Purchase Date, a Termination Event shall have occurred. Upon the occurrence of a Termination Event, the Company shall promptly but in no event later than two Business Days thereafter give written notice to the Agent, the Collateral Agent and to the Holders, at their addresses as they appear in the Stripped Units Register. Upon and after the occurrence of a Termination Event, the Collateral Agent shall release the Pledged Treasury Securities from the Pledge in accordance with the provisions of the Pledge Agreement. Upon registration of transfer of this Stripped Units Certificate, the transferee shall be bound (without the necessity of any other action on the part of such transferee, except as may be required by the Agent pursuant to the Forward Purchase Contract Agreement), by the terms of the Forward Purchase Contract Agreement and the Forward Purchase Contracts evidenced hereby and the transferor shall be released from the obligations under the Forward Purchase Contracts evidenced by this Stripped Units Certificate. The Company covenants and agrees, and the Holder, by its acceptance hereof, likewise covenants and agrees, to be bound by the provisions of this paragraph. The Holder of this Stripped Units Certificate, by its acceptance hereof, authorizes the Agent to enter into and perform the related Forward Purchase Contracts forming part of the Stripped Units evidenced hereby on its behalf as its attorney-in-fact, expressly withholds any consent to the assumption (i.e., affirmance) of the Forward Purchase Contracts by the Company or its trustee in the event that the Company becomes the subject of a case under the Bankruptcy Code, agrees to be bound by the terms and provisions of the Forward Purchase Contracts, covenants and agrees to perform such Holder's obligations under such Forward Purchase Contracts, consents to the provisions of the Forward Purchase Contract Agreement, irrevocably authorizes the Agent to enter into and perform the Pledge Agreement on such Holder's behalf as attorney-in-fact, and consents to and agrees to be bound by the Pledge of the Treasury Securities underlying this Stripped Units Certificate pursuant to the Pledge Agreement, provided, that upon a Termination Event, the rights of the Holder of such Units under the Forward Purchase Contract may be enforced without regard to any other rights or obligations. The Holder further covenants and agrees, that, to the extent and in the manner provided in the Forward Purchase Contract Agreement and the Pledge Agreement, but subject to the terms thereof, payments in respect of the Pledged Treasury Securities, to be paid upon settlement of such Holder's obligations to purchase Common Stock under the Forward Purchase Contract, shall be paid on the Stock Purchase Date by the Collateral Agent to the Company in satisfaction of such Holder's obligations under such Forward Purchase Contract and such Holder shall acquire no right, title or interest in such payments. The Company and each Holder of any Stripped Units, and each Beneficial Owner thereof, by its acceptance thereof or of its interest therein, further agrees to treat (i) the formation of Stripped Units as the purchase of a unit consisting of the Purchase Contract and the Treasury Securities and (ii) the holder as the owner of the applicable interest in the Collateral Account, including the Treasury Securities. B-8 Subject to certain exceptions, the provisions of the Forward Purchase Contract Agreement may be amended with the consent of the Holders of a majority of the Forward Purchase Contracts. The Forward Purchase Contracts shall for all purposes be governed by, and construed in accordance with, the laws of the State of New York, without regard to its principles of conflicts of laws. The Company, the Agent and any agent of the Company or the Agent may treat the Person in whose name this Stripped Units Certificate is registered as the owner of the Stripped Units evidenced hereby for the purpose of receiving any Contract Adjustment Payments and any Deferred Contract Adjustment Payments, performance of the Forward Purchase Contracts and for all other purposes whatsoever (subject to the Record Date provisions hereof), whether or not any payments in respect thereof be overdue and notwithstanding any notice to the contrary, and neither the Company, the Agent, nor any such agent shall be affected by notice to the contrary. The Forward Purchase Contracts shall not, prior to the settlement thereof, entitle the Holder to any of the rights of a holder of shares of Common Stock. A copy of the Forward Purchase Contract Agreement is available for inspection by any Holder at the Corporate Trust Office. B-9 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian (cust) (minor) Under Uniform Gifts to Minors Act (State) TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list. B-10 ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto (Please insert Social Security or Taxpayer I.D. or other Identifying Number of Assignee) (Please Print or Type Name and Address Including Postal Zip Code of Assignee) the within Stripped Units Certificate and all rights thereunder, hereby irrevocably constituting and appointing ____________________________ attorney to transfer said Stripped Units Certificate on the books of American Electric Power Company, Inc. with full power of substitution in the premises. Dated: ______________________ Signature: ___________________________ NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Stripped Units Certificate in every particular, without alteration or enlargement or any change whatsoever. Signature Guarantee: ________________________________________________ B-11 SETTLEMENT INSTRUCTIONS The undersigned Holder directs that a certificate or book-entry interest for shares of Common Stock deliverable upon settlement on or after the Stock Purchase Date of the Forward Purchase Contracts underlying the number of Stripped Units evidenced by this Stripped Units Certificate be registered in the name of, and delivered, together with a check in payment for any fractional share, to the undersigned at the address indicated below unless a different name and address have been indicated below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto. Dated: ___________________ Signature: _____________________________________ Signature Guarantee: ___________________________ (if assigned to another person) If shares are to be registered in the REGISTERED HOLDER name of and delivered to a Person other than the Holder, please (i) print such Please print name and address of Person's name and address and (ii) Registered Holder: provide a guarantee of your signature: Name Name Address Address Social Security or other Taxpayer Identification Number, if any B-12 ELECTION TO SETTLE EARLY The undersigned Holder of this Stripped Units Certificate hereby irrevocably exercises the option to effect Early Settlement in accordance with the terms of the Forward Purchase Contract Agreement with respect to the Forward Purchase Contracts underlying the number of Stripped Units evidenced by this Stripped Units Certificate specified below. The option to effect Early Settlement may be exercised only with respect to Forward Purchase Contracts underlying Stripped Units with an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The undersigned Holder directs that a certificate or book-entry interest for shares of Common Stock deliverable upon such Early Settlement be registered in the name of, and delivered, together with a check in payment for any fractional share and any Stripped Units Certificate representing any Stripped Units evidenced hereby as to which Early Settlement of the related Forward Purchase Contracts is not effected, to the undersigned at the address indicated below unless a different name and address have been indicated below. Pledged Treasury Securities deliverable upon such Early Settlement will be transferred in accordance with the transfer instructions set forth below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto. Dated: ____________________ Signature: ____________________________________ Signature Guarantee: _________________________ Number of Stripped Units evidenced hereby as to which Early Settlement of the related Forward Purchase Contracts is being elected: If shares of Common Stock are to be REGISTERED HOLDER registered in the name of and delivered to and Pledged Treasury Securities are to be Please print name and address of transferred to a Person other than the Registered Holder: Holder, please print such Person's name and address: Name Name Address Address Social Security or other Taxpayer Identification Number, if any Transfer instructions for Pledged Treasury Securities transferable upon Early Settlement or a Termination Event: B-13 (TO BE ATTACHED TO GLOBAL CERTIFICATES) SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE The following increases or decreases in this Global Certificate have been made: Stated Amount of the Global Amount of Amount of Certificate Decrease in Stated Increase in Stated Following Such Signature of Amount of the Amount of the Decrease or Authorized Date Global Certificate Global Certificate Increase Signatory B-14 EXHIBIT C INSTRUCTION FROM FORWARD PURCHASE CONTRACT AGENT TO COLLATERAL AGENT The Bank of New York 101 Barclay Street New York, New York 10286 Attention: Corporate Trust Department Re: Equity Units of American Electric Power Company, Inc. (the "Company") We hereby notify you in accordance with Section [4.1] [4.2] of the Pledge Agreement, dated as of June 11, 2002, (the "Pledge Agreement") among the Company, you, as Collateral Agent, Custodial Agent and Securities Intermediary and us, as Forward Purchase Contract Agent and as attorney-in-fact for the holders of [Equity Units] [Stripped Units] from time to time, that the Holder of Equity Units and Stripped Units listed below (the "Holder") has elected to substitute [$_____ aggregate principal amount of Treasury Securities (CUSIP No. _____________)] [$_______ aggregate principal amount of Notes] in exchange for the related [Pledged Notes] [Pledged Treasury Securities] held by you in accordance with the Pledge Agreement and has delivered to us a notice stating that the Holder has Transferred [Treasury Securities] [Notes] to you, as Collateral Agent. We hereby instruct you, upon receipt of such [Pledged Treasury Securities] [Pledged Notes], and upon the payment by such Holder of any applicable fees, to release the [Notes] [Treasury Securities] related to such [Equity Units] [Stripped Units] to us in accordance with the Holder's instructions. Capitalized terms used herein but not defined shall have the meaning set forth in the Pledge Agreement. Date: _____________________ THE BANK OF NEW YORK, as Forward Purchase Contract Agent By: ________________________________ Name: Title: C-1 Please print name and address of Registered Holder electing to substitute [Treasury Securities] [Notes] for the [Pledged Notes] [Pledged Treasury Securities]: Name: Social Security or other Taxpayer Identification Number, if any: Address: C-2 EXHIBIT D INSTRUCTION TO FORWARD PURCHASE CONTRACT AGENT The Bank of New York, as Forward Purchase Contract Agent 101 Barclay Street New York, New York 10286 Attention: Corporate Trust Department Telecopy: Re: Equity Units of American Electric Power Company, Inc. (the "Company") The undersigned Holder hereby notifies you that it has delivered to The Bank of New York, as Collateral Agent, Custodial Agent and Securities Intermediary [$_______ aggregate principal amount of Treasury Securities (CUSIP No. ______________)] [$_______ aggregate principal amount of Notes] in exchange for the related [Pledged Notes] [Pledged Treasury Securities] held by the Collateral Agent, in accordance with Section [4.1] [4.2] of the Pledge Agreement, dated June 11, 2002 (the "Pledge Agreement"), among you, the Company and the Collateral Agent. The undersigned Holder has paid the Collateral Agent all applicable fees relating to such exchange. The undersigned Holder hereby instructs you to instruct the Collateral Agent to release to you on behalf of the undersigned Holder the [Pledged Notes] [Pledged Treasury Securities] related to such [Equity Units] [Stripped Units]. Capitalized terms used herein but not defined shall have the meaning set forth in the Pledge Agreement. Date: ___________________ Signature:____________________________ Signature Guarantee:__________________ Please print name and address of Registered Holder: Name: Social Security or other Taxpayer Identification Number, if any: Address: D-1 EXHIBIT E NOTICE TO SETTLE BY CASH The Bank of New York, as Forward Purchase Contract Agent 101 Barclay Street New York, New York 10286 Attention: Corporate Trust Department Telecopy: (212) 328-8243 Re: Equity Units of American Electric Power Company, Inc. (the "Company") The undersigned Holder hereby irrevocably notifies you in accordance with Section 5.4 of the Forward Purchase Contract Agreement dated as of June 11, 2002 among the Company and yourselves, as Forward Purchase Contract Agent and as Attorney-in-Fact for the Holders of the Forward Purchase Contracts, that such Holder has elected to pay to the Collateral Agent, on or prior to 11:00 a.m. New York City time, on the seventh Business Day immediately preceding the Stock Purchase Date, (in lawful money of the United States by [certified or cashiers check or] wire transfer, in each case in immediately available funds), $_________ as the Purchase Price for the shares of Common Stock issuable to such Holder by the Company under the related Forward Purchase Contract on the Stock Purchase Date. The undersigned Holder hereby instructs you to notify promptly the Collateral Agent of the undersigned Holder's election to make such cash settlement with respect to the Forward Purchase Contracts related to such Holder's Equity Units. Dated:______________ _________________________________________ Signature Signature Guarantee:_______________ Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. Please print name and address of Registered Holder: Social Security or other Taxpayer Identification Number, if any: E-1 EX-4.2 6 dex42.txt EXHIBIT 4.2 Exhibit 4.2 AMERICAN ELECTRIC POWER COMPANY, INC. AND THE BANK OF NEW YORK, as Trustee ----------------------- THIRD SUPPLEMENTAL INDENTURE Dated as of June 11, 2002 TO INDENTURE Dated as of May 1, 2001 5.75% Senior Notes Due August 16, 2007 ----------------------- TABLE OF CONTENTS*
ARTICLE ONE GENERAL TERMS AND CONDITIONS OF THE SENIOR NOTES Section 1.1. Definitions ..................................................... 1 Section 1.2. Establishment, Designation and Principal Amount ................. 3 Section 1.3. Payment of Principal and Interest ............................... 4 Section 1.4. Denominations ................................................... 5 Section 1.5. Global Securities ............................................... 5 Section 1.6. Remarketing ..................................................... 6 Section 1.7. Optional Remarketing ............................................ 10 Section 1.8. Sinking Fund .................................................... 11 Section 1.9. Redemption and Repurchase ....................................... 11 Section 1.10. Covenants ....................................................... 11 Section 1.11. Tax Event Redemption ............................................ 11 Section 1.12. Tax Treatment ................................................... 12 Section 1.13. Events of Default ............................................... 13 ARTICLE II MISCELLANEOUS PROVISIONS Section 2.1. Recitals by Company ............................................. 16 Section 2.2. Ratification and Incorporation of Original Indenture ............ 16 Section 2.3. Executed in Counterparts ........................................ 16 Section 2.4. Separability .................................................... 16 Section 2.5. Governing Law ................................................... 16 Exhibit A Form of Senior Note ............................................. A-1
- ------------------------- * This Table of Contents does not constitute part of the Indenture or have any bearing upon the interpretation of any of its terms and provisions. THIRD SUPPLEMENTAL INDENTURE, dated as of June 11, 2002 (the "Third Supplemental Indenture"), between AMERICAN ELECTRIC POWER COMPANY, INC., a corporation duly organized and existing under the laws of the State of New York (hereinafter sometimes referred to as the "Company"), and THE BANK OF NEW YORK, a New York banking corporation, as trustee (hereinafter sometimes referred to as the "Trustee"), under the Indenture dated as of May 1, 2001 between the Company and the Trustee (the "Original Indenture"). The Original Indenture, as previously supplemented from time to time, including by this Third Supplemental Indenture, is hereafter referred to as the "Indenture." WITNESSETH: WHEREAS, the Company has executed and delivered the Original Indenture to the Trustee to provide for the issuance of unsecured promissory notes or other evidences of indebtedness (the "Securities") in an unlimited aggregate principal amount, to be issued from time to time in one or more series as provided in the Original Indenture; and WHEREAS, pursuant to the terms of the Original Indenture, the Company desires to provide for the establishment of a new series of its Securities (said series being hereinafter referred to as the "Senior Notes"), the form and substance of such Senior Notes and the terms, provisions and conditions thereof to be set forth as provided in the Original Indenture and this Third Supplemental Indenture; and WHEREAS, the Company desires and has requested the Trustee to join with it in the execution and delivery of this Third Supplemental Indenture, and all requirements necessary to make this Third Supplemental Indenture a valid instrument, in accordance with its terms, and to make the Senior Notes, when executed by the Company and authenticated and delivered by the Trustee, the valid obligations of the Company, have been performed and fulfilled, and the execution and delivery hereof have been in all respects duly authorized; NOW THEREFORE, in consideration of the purchase and acceptance of the Senior Notes by the holders thereof, and for the purpose of setting forth, as provided in the Original Indenture, the form and substance of the Senior Notes and the terms, provisions and conditions thereof, the Company covenants and agrees with the Trustee as follows: ARTICLE ONE GENERAL TERMS AND CONDITIONS OF THE SENIOR NOTES SECTION 1.1. Definitions. Except as otherwise expressly provided in or pursuant to this Third Supplemental Indenture or unless the context otherwise requires: (1) a term defined in the Original Indenture has the same meaning when used in this Third Supplemental Indenture; (2) a term defined anywhere in this Third Supplemental Indenture has the same meaning throughout; (3) the singular includes the plural and vice versa; (4) headings are for convenience of reference only and do not affect interpretation; (5) capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Original Indenture, the Forward Purchase Contract Agreement, the Remarketing Agreement or the Pledge Agreement, as the case may be and as the context may require; and (6) the following terms have the meanings given to them in this Section 1.1(6): "Business Day" means any day other than a Saturday, Sunday or any other day on which banking institutions and trust companies the State of New York or at a place of payment are authorized or required by law, regulation or executive order to be closed. "Company" has the meaning set forth in the preamble. "Contingent Payment Regulations" has the meaning set forth in Section 1.13. "Forward Purchase Contract Agent" means The Bank of New York. "Forward Purchase Contract Agreement" means the agreement, dated as of June 11, 2002, between the Company and the Forward Purchase Contract Agent. "Global Securities" has the meaning set forth in Section 1.5. "Interest Payment Date" has the meaning set forth in Section 1.3. "Pledge Agreement" means the Pledge Agreement, dated as of June 11, 2002, between the Company and The Bank of New York, as Forward Purchase Contract Agent, Collateral Agent, Custodial Agent and Securities Intermediary. "Regular Record Date" means, with respect to each Interest Payment Date, the close of business on the Business Day preceding such Interest Payment Date; provided, that with respect to Separate Notes that are not in book-entry only form, the Regular Record Date shall be the close of business on the 15/th/ Business Day preceding such Interest Payment Date. "Remarketing" means any remarketing conducted pursuant to and in accordance with the Remarketing Agreement. "Remarketing Agreement" means the Remarketing Agreement, dated as of June 11, 2002, by and among the Company, the Remarketing Agent and the Forward Purchase Contract Agent. 2 "Remarketing Value" means (i) the value at the Remarketing Date or any Subsequent Remarketing Date, as the case may be, of either (a) U.S. Treasury securities that will pay, on or prior to the Payment Date falling on the Stock Purchase Date, an amount of cash equal to the aggregate interest payment that is scheduled to be payable on that Payment Date, on (x) the Notes which are included in Equity Units and are participating in the remarketing and (y) the Separate Notes which are to be remarketed pursuant to Section 4.5(d) of the Pledge Agreement, assuming for that purpose that the interest rate on the Notes is equal to the Coupon Rate, if the Remarketing occurs prior to the fourth Business Day preceding the Stock Purchase Date, or (b) an amount of cash equal to the aggregate interest payment that is scheduled to be payable on that Payment Date, on (x) the Notes which are included in Equity Units and are participating in the remarketing and (y) the Separate Notes which are to be remarketed pursuant to Section 4.5(d) of the Pledge Agreement and Section 1.6 of this Third Supplemental Indenture, assuming for that purpose that the interest rate on the Notes is equal to the Coupon Rate, if the Remarketing occurs on or after the fourth Business Day preceding the Stock Purchase Date; and (ii) the value at the Remarketing Date or any Subsequent Remarketing Date, as the case may be, of either (a) U.S. Treasury securities that will pay, on or prior to the Stock Purchase Date, an amount of cash equal to the Stated Amount of (x) such Notes which are included in Equity Units and are participating in the remarketing and (y) the Separate Notes which are to be remarketed pursuant to Section 4.5(d) of the Pledge Agreement, if the Remarketing occurs prior to the fourth Business Day preceding the Stock Purchase Date, or (b) an amount of cash equal to the Stated Amount of (x) such Notes which are included in Equity Units and are participating in the remarketing and (y) the Separate Notes which are to be remarketed pursuant to Section 4.5(d) of the Pledge Agreement and Section 1.6 of this Third Supplemental Indenture, if the Remarketing occurs on or after the fourth Business Day preceding the Stock Purchase Date provided that for purposes of clauses (1) and (2) above, the Remarketing Value shall be calculated on the assumptions that (x) the U.S. Treasury securities are highly liquid and mature on or within 35 days prior to the Stock Purchase Date, as determined in good faith by the Remarketing Agent in a manner intended to minimize the cash value of the U.S. Treasury securities, and (y) the U.S. Treasury securities are valued based on the ask-side price of the U.S. Treasury securities at a time between 9:00 a.m. and 11:00 a.m., New York City time, selected by the Remarketing Agent, on the Remarketing Date or any Subsequent Remarketing Date, as the case may be, as determined on a third-day settlement basis by reasonable and customary means selected in good faith by the Remarketing Agent, plus accrued interest to that date. 3 "Reset Rate" means the interest rate per annum with respect to the Senior Notes that is determined by the Remarketing Agent pursuant to the Remarketing Agreement as follows: (i) in connection with a successful Remarketing, the rate of interest that, in the opinion of the Remarketing Agent, will, when applied to the Outstanding Senior Notes, enable the then current aggregate market value of the Senior Notes to have a value equal to approximately, but not less than, 100.25% of the Remarketing Value as of the Remarketing Date or as of any Subsequent Remarketing Date, as the case may be; or (ii) upon the occurrence of a Failed Remarketing, the rate of interest applicable to the Senior Notes initially until (A) the Senior Notes are successfully remarketed pursuant to the Forward Purchase Contract Agreement and the Remarketing Agreement or (B) if the Last Failed Remarketing shall have occurred, a market rate of interest as determined in accordance with Section 1.6 of this Supplemental Indenture. "Senior Notes" has the meaning set forth in the recitals. "Stated Maturity" means August 16, 2007. "Telerate" means the Dow Jones Telerate Service. "Tax Event Redemption Date" has the meaning set forth in Section 1.11. SECTION 1.2. Establishment, Designation and Principal Amount. (a) There shall be and is hereby authorized a series of Securities under the Original Indenture designated the "5.75% Senior Notes Due August 16, 2007," in the initial aggregate principal amount of $300,000,000, which amount shall be as set forth in the Company Order for the authentication and delivery of the Senior Notes pursuant to Section 2.04 of the Original Indenture. Such aggregate principal amount of the 5.75% Senior Notes Due August 16, 2007 may be increased from time to time in accordance with Section 2.01 of the Original Indenture. (b) The Senior Notes shall mature and the principal shall be due and payable together with all accrued and unpaid interest thereon on August 16, 2007. (c) The Senior Notes that are part of the Equity Units shall be issued in definitive fully registered form (the "Registered Securities"), without coupons, in substantially the form set out in Exhibit A hereto. The entire principal amount of the Senior Notes shall initially be evidenced by one or more certificates issued to The Bank of New York, as the Forward Purchase Contract Agent under the Forward Purchase Contract Agreement (as defined below). (d) The Senior Notes that, in accordance with the Forward Purchase Contract Agreement, are no longer part of Equity Units shall be represented initially by Global Securities (as defined below). Each such Registered Security and Global Security shall represent such aggregate principal amount of the Outstanding Senior Notes as shall be from time to time endorsed thereon, which principal amounts may be increased or 4 decreased, as applicable, to reflect Transfers from Pledged Notes to Separate Notes and Transfers from Separate Notes to Pledged Notes. Any such increase or decrease in the aggregate principal amount of (i) Registered Securities shall be made by the Collateral Agent and (ii) Global Securities representing Senior Notes shall be made by the Trustee, as custodian of the Global Securities, in each case upon the instructions of the Collateral Agent given pursuant to Article IV of the Pledge Agreement. SECTION 1.3. Payment of Principal and Interest. (a) The unpaid principal amount of the Senior Notes shall initially bear interest at the rate of 5.75% per annum, payable on each February 16, May 16, August 16 and November 16 (each, with respect to the Senior Notes, an "Interest Payment Date"), from the original date of issuance, to, but excluding, the earlier of (i) the settlement date of a successful Remarketing under the Forward Purchase Contract Agreement or (ii) the Stock Purchase Date, and, thereafter, at the Reset Rate to, but excluding, the Stated Maturity of the Senior Notes. (b) Interest shall be payable quarterly in arrears on each Interest Payment Date to the Person in whose name the Senior Notes are registered on the Regular Record Date for such Interest Payment Date; provided that interest payable on the Stated Maturity of principal as provided herein shall be paid to the person to whom principal is payable. Any such interest not punctually paid or duly provided for with respect to any Interest Payment Date falling after the Stock Purchase Date shall forthwith cease to be payable to the registered holders on such regular record date, and may be paid to the person or persons in whose name the Senior Notes are registered at the close of business on a special record date to be fixed by the Trustee for the payment of such defaulted interest, notice whereof shall be given to the registered holders of the Senior Notes not less than ten (10) days prior to such special record date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Senior Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in Section 2.03 of the Original Indenture. (c) The amount of interest payable for any period will be computed (1) for any quarterly period, on the basis of a 360-day year of twelve 30-day months, (2) for any period shorter than a full quarterly period, on the basis of a 30-day month and (3) for periods of less than a month, on the basis of the actual number of days elapsed per 30-day month. If any date on which principal or interest is payable is not a Business Day, then payment of principal or interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. (d) Payment of the principal of and interest on the Senior Notes shall be made at an Office or Agency of the Company or at the Office of the Agent in The City of New York in such coin or currency of the United States of America as at the time of payment 5 is legal tender for payment of public and private debts, with any such payment that is due on the Stated Maturity of any Senior Notes being made upon surrender of such Senior Notes to the Office or Agency of the Company or at the Office of the Agent in The City of New York. Payments of interest will be made, subject to such surrender where applicable, at the option of the Company, (i) by check mailed to the address of the person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least sixteen (16) days prior to the date for payment by the Person entitled hereto. SECTION 1.4. Denominations. The Senior Notes shall be issued in denominations of $50 and integral multiples of $50. SECTION 1.5. Global Securities. (a) The Senior Notes that, in accordance with the Forward Purchase Contract Agreement, are no longer part of the Equity Units will be issued initially in the form of one or more global securities (the "Global Securities") registered in the name of DTC or its nominee. Except under the limited circumstances described below or in Section 1.3 above, Senior Notes represented by such Global Securities will not be exchangeable for, and will not otherwise be issuable as, Senior Notes in definitive form. The Global Securities described above may not be transferred except by DTC to a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC or to a successor Depository or its nominee. (b) Owners of beneficial interests in such a Global Security will not be considered the Holders thereof for any purpose under the Indenture, and no Global Security representing a Senior Note shall be exchangeable, except for another Global Security of like denomination and tenor to be registered in the name of DTC or its nominee or to a successor Depository or its nominee or except as described below. The rights of owners of beneficial interests in such a Global Security shall be exercised only through DTC. (c) A Global Security shall be exchangeable for Senior Notes registered in the names of persons other than DTC or its nominee only if (i) DTC notifies the Company that it is unwilling or unable to continue as a Depository for such Global Security and no successor Depository shall have been appointed by the Company within 90 days of receipt by the Company of such notification, or if at any time DTC ceases to be a clearing agency registered under the Securities Exchange Act of 1934 at a time when DTC is required to be so registered to act as such Depository and no successor Depository shall have been appointed by the Company within 90 days after it becomes aware of such cessation, or (ii) the Company in its sole discretion determines that it no longer has any senior debt securities represented by global securities or that it will permit a Global Security to be exchangeable or an Event of Default under the Indenture has occurred and is continuing. Any Global Security that is exchangeable pursuant to the preceding 6 sentence shall be exchangeable for Senior Notes registered in such names as DTC shall direct. SECTION 1.6. Remarketing. (a) The Pledged Notes comprising part of Equity Units and the Separate Notes of holders of Separate Notes that have elected to participate in the Remarketing shall be remarketed by the Remarketing Agent on the Remarketing Date. A Holder of Equity Units may elect not to participate in a Remarketing and retain the Senior Notes underlying such Equity Units by notifying the Forward Purchase Contract Agent of such election and delivering the Opt-out Treasury Consideration to the Forward Purchase Contract Agent not later than 10:00 a.m. on the fourth Business Day prior to the Remarketing Date, as applicable (or, in the case of a Failed Remarketing, not later than 10:00 a.m. on the fourth Business Day immediately prior to the subsequent Remarketing Period). Upon receipt thereof by the Forward Purchase Contract Agent, the Forward Purchase Contract Agent shall deliver such Opt-out Treasury Consideration to the Collateral Agent, which will, for the benefit of the Company, thereupon apply such Opt-out Treasury Consideration to secure such Holder's obligations under the Forward Purchase Contracts. On the first Business Day immediately preceding the Remarketing Date (or, in the case of a Failed Remarketing, the subsequent Remarketing Period), the Collateral Agent, pursuant to the terms of the Pledge Agreement, will deliver the Pledged Notes to the Forward Purchase Contract Agent. Within three Business Days following any Remarketing Period (A) if the Remarketing was successful, the Forward Purchase Contract Agent shall distribute such Notes to the new Holders thereof and (B) if there was a Failed Remarketing, the Forward Purchase Contract Agent will deliver such Notes to the Collateral Agent, which will, for the benefit of the Company, thereupon apply such Notes that are a component of Equity Units to secure such Holders' obligations under the Forward Purchase Contracts, return any Opt-out Treasury Consideration delivered by such Holders to such Holders and return the Separate Notes to the holders thereof. A Holder that does not so deliver the Opt-out Treasury Consideration or has not settled the related Purchase Contract through a Cash Settlement or an Early Settlement pursuant to Sections 5.4 and 5.9 of the Forward Purchase Contract Agreement shall be deemed to have elected to participate in the Remarketing. (b) On the seventh Business Day prior to the Remarketing Date or the first day of any subsequent Remarketing Period, the Company shall give Holders of Equity Units and Holders of Separate Notes notice of the Remarketing in an Authorized Newspaper, including the specific U.S. Treasury security or securities (including the CUSIP number and/or the principal terms of such Treasury security or securities) that must be delivered by Holders of Equity Units that elect not to participate in the Remarketing pursuant to Section 5.4(g) of the Forward Purchase Contract Agreement, no later than 10:00 a.m. (New York City time) on the seventh Business Day preceding the Remarketing Date. Not later than seven nor more than 15 calendar days prior to any Remarketing Period, the Company shall request DTC (or any successor Clearing Agency) to notify, directly or indirectly, each Beneficial Owner or Clearing Agency Participant holding Equity Units or Stripped Units and each Beneficial Owner of a Separate Note of 7 the Remarketing and of the procedures that must be followed in connection with the Remarketing. (c) The Forward Purchase Contract Agent shall notify, by 10:00 a.m., New York City time, on the third Business Date preceding the Remarketing Date or the first day of any subsequent Remarketing Period, as applicable, the Remarketing Agent and the Collateral Agent of the aggregate number of Senior Notes of Equity Units Holders to be remarketed. On the third Business Day immediately preceding the Remarketing Date or the first day of any subsequent Remarketing Period, as applicable, no later than by 10:00 a.m. New York City time, pursuant to the terms of the Pledge Agreement, the Custodial Agent will notify the Remarketing Agent of the aggregate number of Separate Notes to be remarketed. On the third Business Day immediately preceding the Remarketing Date or the first day of any subsequent Remarketing Period, as applicable, the Collateral Agent and the Custodial Agent, pursuant to the terms of the Pledge Agreement, will deliver for Remarketing to the Remarketing Agent all Notes to be remarketed. Upon receipt of such notice from the Forward Purchase Contract Agent and the Custodial Agent and such Notes from the Collateral Agent and the Custodial Agent, the Remarketing Agent will, on the Remarketing Date, use its commercially reasonable best efforts to establish a Reset Rate pursuant to clause (i) of the definition of Reset Rate and remarket such Senior Notes pursuant to the Remarketing procedures in the Remarketing Agreement. (d) The right of each Holder of Senior Notes to have its Senior Notes tendered for purchase will be limited to the extent that (i) the Remarketing Agent conducts a Remarketing pursuant to the terms of the Remarketing Agreement, (ii) the Remarketing Agent is able to find a purchaser or purchasers for the tendered Senior Notes and (iii) such purchaser or purchasers deliver the purchase price therefor to the Remarketing Agent. (e) Upon receipt of the notice provided above in paragraph (c) from the Forward Purchase Contract Agent and the Custodial Agent and such Notes from the Collateral Agent and the Custodial Agent, the Remarketing Agent will, on the Remarketing Date, use its commercially reasonable best efforts to (i) establish a rate of interest that, in the opinion of the Remarketing Agent, will, when applied to the outstanding Notes, enable the then current aggregate market value of the Notes to have a value equal to approximately, but not less than, 100.25% of the Remarketing Value as of the Remarketing Date or as of any Subsequent Remarketing Date, as the case may be (the "Reset Rate") and (ii) sell such Notes on such date at a price equal to approximately, but not less than, 100.25% of the Remarketing Value. (f) If, in spite of using its commercially reasonable best efforts, the Remarketing Agent cannot establish the Reset Rate and remarket the Notes included in the remarketing at a price equal to approximately, but not less than, 100.25% of the Remarketing Value, the Remarketing Agent will again attempt to establish the Reset Rate and remarket the Notes included in the remarketing at a price equal to approximately, but not less than, 100.25% of the Remarketing Value on each of the two immediately following Business Days. If the Remarketing Agent cannot remarket the Notes included in the remarketing at a price equal to approximately, but not less than, 100.25% of the 8 Remarketing Value on any of those days, it will attempt to establish the Reset Rate and remarket the Notes included in the remarketing at a price equal to approximately, but not less than, 100.25% of the Remarketing Value on each of the three Business Days immediately preceding June 16, 2005. If the Remarketing Agent cannot remarket the Notes included in the remarketing at a price equal to approximately, but not less than, 100.25% of the Remarketing Value on any of those days, it will attempt to establish the Reset Rate and remarket the Notes included in the remarketing at a price equal to approximately, but not less than, 100.25% of the Remarketing Value on each of the three Business Days immediately preceding July 16, 2005. If the Remarketing Agent cannot establish the Reset Rate and remarket the Notes included in the remarketing at a price equal to approximately, but not less than, 100.25% of the Remarketing Value either on any of the two Business Days immediately following the Remarketing Date or on any of the three Business Days immediately preceding June 16, 2005 or on any of the three Business Days immediately preceding July 16, 2005, the remarketing in each period will be deemed to have failed (each, a "Failed Remarketing"). If the Remarketing Agent cannot establish the Reset Rate and remarket the Notes included in the remarketing at a price equal to approximately, but not less than, 100.25% of the Remarketing Value on any of the three Business Days immediately preceding July 16, 2005, the Remarketing Agent will further attempt to establish the Reset Rate and remarket the Notes included in the remarketing at a price equal to approximately, but not less than, 100.25% of the Remarketing Value on each of the three Business Days immediately preceding August 12, 2005. If, in spite of using its commercially reasonable best efforts, the Remarketing Agent fails to remarket the Notes underlying the Equity Units at a price equal to approximately, but not less than, 100.25% of the Remarketing Value in accordance with the terms of the Pledge Agreement by 4:00 p.m., New York City time, on the third Business Day immediately preceding the Stock Purchase Date, a "Last Failed Remarketing" will be deemed to have occurred. (g) If a successful Remarketing shall have occurred prior to the fourth Business Day preceding the Stock Purchase Date, the Remarketing Agent will, in accordance with the Forward Purchase Contract Agreement and the Remarketing Agreement: (i) deduct and retain for itself the Remarketing Fee; (ii) use the proceeds from such successful Remarketing to purchase the Agent-purchased Treasury Consideration with the CUSIP numbers, if any, selected by the Remarketing Agent, described in clauses (1) and (2) of the definition of Remarketing Value related to the Senior Notes of Holders of Equity Units that were remarketed; (iii) if any Separate Notes were remarketed, remit to the Collateral Agent for payment to the Holders of such Separate Notes sold in the Remarketing the remaining proceeds from such successful Remarketing attributable to the Separate Notes; and 9 (iv) if there remain any proceeds from such successful Remarketing, after the application of such proceeds as set forth in clauses (i) through (iii) of this sentence, then remit such remaining proceeds to the Forward Purchase Contract Agent for payment to the Holders of the Equity Units that were remarketed, on a pro rata basis, in accordance with the Remarketing Agreement. (h) In the case of a successful Remarketing occurring prior to the fourth Business Day preceding the Stock Purchase Date, on or prior to the third Business Day following the Remarketing Date or any Subsequent Remarketing Date, the Remarketing Agent shall deliver such Agent-purchased Treasury Consideration to the Forward Purchase Contract Agent, which shall thereupon deliver such Agent-purchased Treasury Consideration to the Collateral Agent. The Collateral Agent, for the benefit of the Company, will thereupon apply such Agent-purchased Treasury Consideration, in accordance with the Pledge Agreement, to secure such Holders' obligations under the Forward Purchase Contracts. (i) If a successful Remarketing shall have occurred on or after the fourth Business Day preceding the Stock Purchase Date, the Remarketing Agent will, in accordance with the Forward Purchase Contract Agreement and the Remarketing Agreement: (i) deduct and retain for itself the Remarketing Fee; (ii) pay the proceeds from such successful Remarketing to the Forward Purchase Contract Agent, which shall thereupon deliver such proceeds to the Collateral Agent which, for the benefit of the Company, will thereupon apply such proceeds, in accordance with the Pledge Agreement in direct settlement of the Holders' obligations under the Forward Purchase Contracts; (iii) if any Separate Notes were remarketed, remit to the Collateral Agent for payment to the Holders of such Separate Notes sold in the Remarketing the remaining proceeds from such successful Remarketing attributable to the Separate Notes; and (iv) if there remain any proceeds from such successful Remarketing, after the application of such proceeds as set forth in clauses (i) through (iii) of this sentence, then remit such remaining proceeds to the Forward Purchase Contract Agent for payment to the Holders of the Equity Units that were remarketed, on a pro rata basis, in accordance with the Remarketing Agreement. (j) If a successful Remarketing occurs, by approximately 4:30 p.m. (New York City time) on the Remarketing Date, the Remarketing Agent shall advise, by telephone (promptly confirmed in writing in the case of clause (i)): (i) the Company, the Forward Purchase Contract Agent, the Collateral Agent, the Securities Intermediary, DTC and the Trustee of the Reset Rate 10 determined in the Remarketing; (ii) each purchaser (or the Depository Participant thereof) of Senior Notes in the Remarketing of the Reset Rate and the number of Senior Notes such purchaser is to purchase; and (iii) each purchaser to give instructions to its Depository Participant to pay the purchase price on the date of settlement for such Remarketing in same day funds against delivery of the remarketed Senior Notes purchased through the facilities of DTC. (k) Any distribution to Holders of excess funds and interest described in this Section 1.6 shall be payable at the Office of the Agent in The City of New York maintained for that purpose or, at the option of the Holder or the holder of Separate Notes, as applicable, by check mailed to the address of the Person entitled thereto at such address as it appears on the relevant Register or by wire transfer to an account specified by the Holder or the holder of Separate Notes, as applicable. (l) If a Failed Remarketing occurs, the Remarketing Agent and the Company, as applicable, shall take the following actions: (i) the Remarketing Agent shall notify by telephone the Company, the Forward Purchase Contract Agent, the Collateral Agent and the Trustee, that a Failed Remarketing has occurred, whereupon the Company shall notify the Clearing Agency, by telephone, that a Failed Remarketing has occurred; (ii) with respect to any Remarketing Period during which no successful Remarketing occurred, the Company shall publish notice by means of Bloomberg and Reuters newswires, such notice to be published no later than the fourth Business Day following the end of such Remarketing Period; (iii) the Remarketing Agent shall determine the Reset Rate in accordance with clause (ii) of the Reset Rate definition; and (iv) the Remarketing Agent shall remit, within three Business Days following the end of a Remarketing Period which constituted a Failed Remarketing, the Pledged Notes that were to be remarketed to the Collateral Agent and the Separate Notes that were to be remarketed to the Custodial Agent. (m) If upon a Last Failed Remarketing, the Collateral Agent delivers any Senior Notes to the Company in full satisfaction of the Holder's obligation under the related Forward Purchase Contracts, any accumulated and unpaid interest on such Notes will become payable by the Company to the Forward Purchase Contract Agent for payment to the Holder of the Equity Units to which such Notes relate. Such payment will be made by the Company on or prior to 11:00 a.m., New York City time, on the Stock Purchase Date in lawful money of the United States by certified or cashier's check or wire transfer in immediately available funds payable to or upon the order of the Forward 11 Purchase Contract Agent. Upon the occurrence of a Last Failed Remarketing, the Company will retain and dispose of the Pledged Notes of all Holders in satisfaction of the Holders' obligations under the related Forward Purchase Contracts. The Company will publish notice by means of Bloomberg and Reuters newswires of any Remarketing Period during which no successful Remarketing occurred, such notice to be published not later than the fourth Business Day following the end of such Remarketing Period. The Company will cause a notice of the Last Failed Remarketing to be published on the fourth Business Day following the date of the Last Failed Remarketing in an Authorized Newspaper. (n) In the event of a Last Failed Remarketing, the Remarketing Agent shall determine the Reset Rate that shall apply to the Senior Notes held by the Holders of Equity Units that elected not to participate in the remarketing and Holders of Separate Notes according to the following method, provided that in no event shall the Reset Rate exceed the maximum rate permitted by state usury laws and other applicable laws. After the Last Failed Remarketing, the Remarketing Agent will take the average of the interest rates quoted to it by three nationally recognized investment banks selected by the Company, which are underwriters or dealers in debt securities similar to the Senior Notes, that in their judgment reflects an accurate market rate of interest applicable to the Senior Notes at that time. Following receipt of these quotes, the Remarketing Agent will have the right, in its sole judgment, to either recalculate the average based on only two of the quoted interest rates if one of the three quotes, in the Remarketing Agent's sole discretion, did not reflect market conditions or, alternatively, determine a consensus among the investment banks rather than a strict mathematical average by taking into account all relevant qualitative and quantitative factors. These factors may include, but shall not limited to, maturity of the Senior Notes, the credit rating and credit risk of the Company and companies of similar industries, the then yield to maturity of the Senior Notes and the state of the markets for primary and secondary sales of similar debt securities. (o) In accordance with DTC's normal procedures, on the date of settlement of such Remarketing or the Stock Purchase Date, as applicable, the transactions described above with respect to each Senior Notes remarketed in the Remarketing shall be executed through DTC, and the accounts of the respective Depository Participants shall be debited and credited and such remarketed Senior Notes delivered by book entry as necessary to effect purchases and sales of such remarketed Senior Notes. DTC shall make payment in accordance with its normal procedures. (p) If any Holder of Senior Notes selling Senior Notes in the Remarketing fails to deliver such Senior Notes, the direct or indirect Depository Participant of such selling Holder and of any other Person who was to have purchased Senior Notes in the Remarketing may deliver to any such other Person an aggregate principal amount of Senior Notes that is less than the aggregate principal amount of Senior Notes that otherwise was to be purchased by such Person. In such event, the aggregate principal amount of Senior Notes to be so delivered shall be determined by such direct or indirect Depository Participant, and delivery of such lesser aggregate principal amount of Senior Notes shall constitute good delivery. 12 (q) The Remarketing Agent is not obligated to purchase any Senior Notes that otherwise would remain unsold in the Remarketing. Neither the Company nor the Remarketing Agent shall be obligated in any case to provide funds to make payment upon tender of the Senior Notes for Remarketing. (r) Under the Remarketing Agreement, the Company, in its capacity as issuer of the Senior Notes, shall be liable for, and shall pay, any and all costs and expenses incurred in connection with the Remarketing, other than the Remarketing Fee. (s) The settlement procedures set forth herein, including provisions for payment by purchasers of the remarketed Senior Notes in the Remarketing, shall be subject to modification to the extent required by DTC or if the book-entry system is no longer available for the remarketed Senior Notes at the time of the Remarketing, to facilitate the Remarketing of the remarketed Senior Notes in certificated form, and shall provide for the authentication and delivery of Senior Notes in a principal amount equal to the unremarketed portion of such Senior Notes. In addition, the Remarketing Agent may modify the settlement procedures set forth herein in order to facilitate the settlement process. SECTION 1.7. Optional Remarketing. (a) On or prior to the fourth Business Day immediately preceding either the Remarketing Date or if applicable, the first day of any subsequent Remarketing Period, but no earlier than the Interest Payment Date immediately preceding the last Interest Payment Date before the Stock Purchase Date, holders of Separate Notes may elect to have their Separate Notes remarketed by Transferring their Separate Notes and delivering a notice of such election, substantially in the form of Exhibit C to the Pledge Agreement, to the Collateral Agent. On the third Business Day immediately prior to the Remarketing Date or the first day of any subsequent Remarketing Period, by 10:00 a.m., New York City time, the Collateral Agent shall notify the Remarketing Agent of the number of such Separate Notes to be remarketed. The Collateral Agent will hold such Separate Notes in an account separate from the Collateral Account. A holder of Separate Notes electing to have its Separate Notes remarketed will also have the right to withdraw such election by written notice to the Collateral Agent, substantially in the form of Exhibit D to the Pledge Agreement, on or prior to the fourth Business Day immediately preceding the applicable Remarketing Date or the first day of a subsequent Remarketing Period, upon which notice the Collateral Agent will return such Separate Notes to such holder. (b) On the third Business Day immediately preceding the Remarketing Date or the first day of any subsequent Remarketing Period, the Collateral Agent at the written direction of the Remarketing Agent will deliver to the Remarketing Agent for Remarketing all Separate Notes delivered to the Collateral Agent pursuant to Section 4.5(d) of the Pledge Agreement and not withdrawn pursuant to the terms thereof prior to such date. If the holder of the Separate Notes delivers only such notice but not the Separate Notes subject to such notice, then none of such holder's Separate Notes shall be included in the Remarketing. Once the holder of Separate Notes elects to participate in 13 the Remarketing, such Separate Notes will be remarketed in the Remarketing, unless such notice is properly withdrawn. In accordance with Section 4.5(d) of the Pledge Agreement, upon the occurrence of a Failed Remarketing, the Remarketing Agent will promptly return such Separate Notes to the Collateral Agent for redelivery to such holders of such Separate Notes. SECTION 1.8. Sinking Fund. The Senior Notes shall not be entitled to any sinking fund. SECTION 1.9. Redemption and Repurchase. Except as provided in Section 1.12, the Senior Notes shall not be redeemable prior to their Stated Maturity. SECTION 1.10. Covenants. (a) For so long as any Senior Notes of this series remain outstanding, the Company will not create or incur or allow any of its subsidiaries to create or incur any pledge or security interest on any of the capital stock of a Public Utility Subsidiary held by the Company or one of its subsidiaries or a Significant Subsidiary. For purposes of this covenant: (i) Public Utility Subsidiary means, at any particular time, a direct or indirect subsidiary of the Company that, as a substantial part of its business, distributes or transmits electric energy to retail or wholesale customers at rates or tariffs that are regulated by either a state or Federal regulatory authority. (ii) Significant Subsidiary means, at any particular time, any direct subsidiary of the Company whose consolidated gross assets or consolidated gross revenues (having regard to the Company's direct beneficial interest in the shares, or the like, of that subsidiary) represent at least 25% of the Company's consolidated gross assets or consolidated gross revenues appearing in the most recent audited financial statements of the Company as of the date of determination. (b) The provisions of Article Ten of the Original Indenture shall be applicable to the Senior Notes. SECTION 1.11. Defeasance. The provisions of Section 11.01 of the Original Indenture shall not apply to the Senior Notes. SECTION 1.12. Tax Event Redemption. (a) If a Tax Event shall occur, the Company may, at its option, redeem the 14 Senior Notes in whole (but not in part) at any time at a price per Senior Note equal to the Redemption Price. Installments of interest on the Senior Notes that are due and payable on or prior to the date of redemption (the "Tax Event Redemption Date") will be payable to the Holders of the Senior Notes registered as such on the Record Date next preceding such Tax Event Redemption Date. If, following the settlement of the Forward Purchase Contracts and following the occurrence of a Tax Event, the Company, at its option, redeems the Senior Notes, the proceeds of the redemption will be payable in cash to the Holders of the Senior Notes. (b) If the Company exercises its option to redeem the Senior Notes following the occurrence of a Tax Event prior to the Remarketing Date, or if there has not been a successful Remarketing prior to the Stock Purchase Date, the Company shall in the notice to the Trustee pursuant to Section 3.02 of the Original Indenture specify the Redemption Price. Upon the specification of the Redemption Price by the Company, the Company shall appoint the Collateral Agent to acquire the Treasury Portfolio in consultation with the Company and in accordance with the Forward Purchase Contract Agreement. The Collateral Agent shall then apply, out of the aggregate Redemption Price for the Senior Notes that are components of Equity Units, an amount equal to the aggregate Redemption Amount for the Senior Notes that are components of Equity Units to purchase on behalf of the Holders of Equity Units the Treasury Portfolio and promptly remit the remaining portion, if any, of such aggregate Redemption Price to the Forward Purchase Contract Agent for payment to the Holders of such Equity Units. The Treasury Portfolio will be substituted for the Pledged Notes, and will be pledged to the Collateral Agent in accordance with the terms of the Pledge Agreement to secure the obligation of each Holder of an Equity Unit to purchase the Common Stock under the Forward Purchase Contract constituting a part of such Equity Units. Payment of the Redemption Price to Holders of Separate Notes shall be made in cash on the Tax Event Redemption Date. (c) If a Tax Event Redemption occurs after the earlier of a successful Remarketing or the Stock Purchase Date, payment of the Redemption Price to each Holder of Senior Notes shall be made by the Trustee (subject to its receipt of funds), no later than 12:00 noon, New York City time, on the Tax Event Redemption Date, by check or wire transfer in immediately available funds (provided the necessary wire instructions have been provided to the Trustee at least 15 days prior to the Tax Event Redemption Date) at such place and to such account as may be designated by each such Holder of Senior Notes, including the Collateral Agent. If the Trustee holds immediately available funds sufficient to pay the Redemption Price of the Senior Notes, then, on such Tax Event Redemption Date, such Senior Notes will cease to be Outstanding. (d) The Trustee shall have no duty or liability to determine or verify the Redemption Price. Notice of any redemption will be mailed at least 30 days but not more than 60 days before the Tax Event Redemption Date to each registered Holder of the Senior Notes to be repaid at its registered address. Unless the Company defaults in payment of the Redemption Price, on and after the Tax Event Redemption Date interest shall cease to accrue on the Senior Notes, whether or not such Senior Notes have been received by the Company, and all other rights of the Holders in respect of the Senior Notes shall terminate and lapse (other than the right to receive the Redemption Price 15 upon delivery of such Senior Notes but without interest on such Redemption Price). SECTION 1.13. Tax Treatment. The Company agrees, and by acceptance of a beneficial ownership interest in the Senior Notes, each beneficial holder of Senior Notes will be deemed to have agreed (1) to treat the acquisition of an Equity Unit as the acquisition of the Senior Note and the Forward Purchase Contract constituting the Equity Unit and to allocate the purchase price of the Equity Unit between the Senior Note and the Forward Purchase Contract as $50 and $0, respectively, (2) to treat the Senior Notes as indebtedness that is subject to Treas. Reg. Sec. 1.1275-4 (the "Contingent Payment Regulations") for United States federal income tax purposes and (3) to be bound by the Company's determination of the "comparable yield" and "projected payment schedule," within the meaning of the Contingent Payment Regulations, with respect to the Senior Notes for United States federal income tax purposes. A Holder of Senior Notes may obtain the amount of original issue discount, issue date, yield to maturity, comparable yield and projected payment schedule by submitting a written request for it to the Company at the following address: American Electric Power, Investor Relations, One Riverside Plaza, Columbus, Ohio 43215. ARTICLE TWO MISCELLANEOUS PROVISIONS SECTION 2.1. Recitals by Company. The recitals in this Third Supplemental Indenture are made by the Company only and not by the Trustee, and all of the provisions contained in the Original Indenture in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect of the Senior Notes and of this Third Supplemental Indenture as fully and with like effect as if set forth herein in full. SECTION 2.2. Ratification and Incorporation of Original Indenture. As supplemented hereby, the Original Indenture is in all respects ratified and confirmed, and the Original Indenture and this Third Supplemental Indenture shall be read, taken and construed as one and the same instrument. SECTION 2.3. Executed in Counterparts. This Third Supplemental Indenture may be executed in several counterparts, each of which shall be deemed to be an original, and such counterparts shall together constitute but one and the same instrument. SECTION 2.4. Separability. In case any provisions contained in this Third Supplemental Indenture or in any Senior Note shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 2.5. Governing Law. THIS THIRD SUPPLEMENTAL INDENTURE 16 AND EACH SENIOR NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE OR INSTRUMENTS ENTERED INTO AND, IN EACH CASE, PERFORMED IN SAID STATE. 17 IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental Indenture to be duly executed, and their respective corporate seals to be hereunto affixed, all as of the day and year first above written. AMERICAN ELECTRIC POWER COMPANY, INC. By:________________________________ Name: Title: 18 THE BANK OF NEW YORK, as Trustee By:______________________________ Name: Title: 19 EXHIBIT A FORM OF SENIOR NOTE [Face of Note] [UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL SECURITIES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY OR ANY SUCCESSOR DEPOSITARY APPOINTED AS SUCH PURSUANT TO THE INDENTURE (THE "DEPOSITARY") TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO SUCH A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS GLOBAL SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OR TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF THE DEPOSITARY OR ITS NOMINEE OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT IS MADE TO THE DEPOSITARY OR ITS NOMINEE, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF HAS AN INTEREST HEREIN.]* CUSIP No. ISIN No. No. ___ $_______________ AMERICAN ELECTRIC POWER COMPANY, INC. 5.75% Senior Notes Due August 16, 2007 American Electric Power Company, Inc., a corporation duly organized and existing under the laws of New York (the "Company," which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to [Cede & Co.]* or registered assigns, the principal sum of _______________________ United States Dollars [, or such other principal amount as shall be set forth in the Schedule of Increases or Decreases attached hereto,]** at the Company's Office or Agency or Office of the Agent in The City of New York for said purpose, on August 16, 2007 in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, and to pay interest thereon from June 11, 2002 or from the next most recent date to which interest has been paid or duly provided for, quarterly in arrears on each February 16, May 16, August 16 and November 16 of each year (each such date, an "Interest - ------------------ * Insert in Global Securities. ** Insert in Global Securities and Pledged Notes. A-1 Payment Date"), commencing on August 16, 2002, at the rate of 5.75% per annum to, but excluding, the earlier of (i) the settlement date of a successful Remarketing under the Forward Purchase Contract Agreement or (ii) the Stock Purchase Date, and, thereafter, at the Reset Rate to, but excluding, the Stated Maturity. The amount of interest so payable for any period shall be computed (i) for any full quarterly period on the basis of a 360-day year of twelve 30-day months and (ii) for any period shorter than a full quarterly period, on the basis of a 30-day month and, for periods of less than a month, on the basis of the actual number of days elapsed per 30-day month. In the event that any Interest Payment Date is not a Business Day, then payment of the interest or principal payable on such date will be made on the next succeeding day which is a Business Day and no interest shall accrue in respect of the amounts which payment is so delayed for the period from and after such interest payment date or other payment date, except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. Payments of the principal of and interest on the Senior Notes shall be made at said Office or Agency of the Company or at the Office of the Agent in The City of New York to which interest on the Senior Notes has been paid or duly provided for, until payment of said principal sum has been made or duly provided for; provided that, unless this Senior Note is a Senior Note issued in global form ("Global Security"), interest may be paid, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least sixteen (16) days prior to the date for payment by the Person entitled thereto. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date, as provided in the Indenture, as hereinafter defined, shall be paid to the Person in whose name this Note (or one or more Predecessor Securities) shall have been registered at the close of business on the Regular Record Date with respect to such Interest Payment Date, provided that interest payable on the Stated Maturity or any redemption date shall be paid to the Person to whom principal is paid. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date and shall be paid as provided in said Indenture. Reference is hereby made to the further provisions of this Senior Note set forth herein, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Trustee referred to herein by manual signature, this Senior Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. A-2 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. Dated: ___________________ AMERICAN ELECTRIC POWER COMPANY, INC. By: _________________________________ Name Title: A-3 TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated in accordance with, and referred to in, the within-mentioned Indenture. Dated: ___________________ THE BANK OF NEW YORK, as Trustee By: ___________________________ Authorized Signatory A-4 [Reverse of Note] American Electric Power Company, Inc. 5.75% Senior Notes Due August 16, 2007 This Senior Note is one of a duly authorized issue of securities of the Company (the "Securities"), issued and to be issued in one or more series under an Indenture, dated as of May 1, 2001 (the "Original Indenture"), as previously supplemented and as to be supplemented by a third supplemental indenture, dated as of June 11, 2002 (the "Third Supplemental Indenture" and the Original Indenture, as so supplemented, the "Indenture"), between the Company and The Bank of New York, a New York banking corporation, as trustee (the "Trustee," which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Senior Note is one of a series designated as 5.75% Senior Notes Due August 16, 2007 of the Company (hereinafter called the "Senior Notes"), issued under the Original Indenture, which is limited in aggregate principal amount to $300,000,000. Neither the Original Indenture nor the Senior Notes limit or otherwise restrict the amount of indebtedness which may be incurred or other securities which may be issued by the Company. The Senior Notes issued under the Indenture are direct, unsecured obligations of the Company and will mature on August 16, 2007. The Senior Notes rank on parity with all other unsecured, unsubordinated indebtedness of the Company. The Senior Notes will bear interest as set forth on the face hereof and in the Third Supplemental Indenture. The Reset Rate will be the interest rate per annum that is determined by the Remarketing Agent pursuant to the Remarketing Agreement as follows: (i) in connection with a successful Remarketing, the rate of interest that will, when applied to the Outstanding Notes, enable the then current aggregate market value of the Notes to have a value equal to approximately, but not less than, 100.25% of the Remarketing Value as of the Remarketing Date or as of any Subsequent Remarketing Date, as the case may be, or (ii) upon the occurrence of a Failed Remarketing the rate of interest applicable to the Senior Notes initially until (A) the Senior Notes are successfully remarketed pursuant to the Forward Purchase Contract Agreement and the Remarketing Agreement or (B) if the Last Failed Remarketing shall have occurred, in accordance with the method as described below. Notwithstanding anything herein to the contrary, the Reset Rate shall in no event exceed the maximum rate, if any, permitted by applicable law. In the event of a Last Failed Remarketing, the Remarketing Agent shall determine the Reset Rate that shall apply to the Senior Notes held by the Holders of Equity Units that elected not to participate in the remarketing and Holders of Separate Notes according to the following method. After the Last Failed Remarketing, the Remarketing Agent will take the average of the interest rates quoted to it by three nationally recognized investment banks selected A-5 by the Company, which are underwriters or dealers in debt securities similar to the Senior Notes, that in their judgment reflects an accurate market rate of interest applicable to the Senior Notes at that time. Following receipt of these quotes, the Remarketing Agent will have the right, in its sole judgment, to either recalculate the average based on only two of the quoted interest rates if one of the three quotes, in the Remarketing Agent's sole discretion, did not reflect market conditions or, alternatively, determine a consensus among the investment banks rather than a strict mathematical average by taking into account all relevant qualitative and quantitative factors. These factors may include, but shall not limited to, maturity of the Senior Notes, the credit rating and credit risk of the Company and companies of similar industries, the then yield to maturity of the Senior Notes and the state of the markets for primary and secondary sales of similar debt securities. The Senior Notes are not redeemable prior to maturity except pursuant to a Tax Event in accordance with the Third Supplemental Indenture. If a Tax Event shall occur, the Company may, at its option, redeem the Senior Notes in whole (but not in part) at any time at a price per Senior Note equal to the Redemption Price. Installments of interest on the Senior Notes that are due and payable on or prior to the date of redemption will be payable to the Holders of the Senior Notes registered as such at the close of business on the Record Date next preceding such Tax Event Redemption Date. If, following the settlement of the Forward Purchase Contracts and following the occurrence of a Tax Event, the Company, at its option, redeems the Senior Notes, the proceeds of the redemption will be payable in cash to the Holders of the Senior Notes. The Company agrees, and by acceptance of a beneficial ownership interest in the Senior Notes, each beneficial holder of Senior Notes will be deemed to have agreed (1) for United States federal, state and local income and franchise tax purposes to treat the acquisition of an Equity Unit as the acquisition of the Senior Note and the Forward Purchase Contract constituting the Equity Unit, (2) to treat the Senior Notes as indebtedness that is subject to Treas. Reg. Sec. 1.1275-4 (the "Contingent Payment Regulations") for United States federal income tax purposes and (3) to be bound by the Company's determination of the "comparable yield" and "projected payment schedule," within the meaning of the Contingent Payment Regulations, with respect to the Senior Notes for United States federal income tax purposes. A Holder of Senior Notes may obtain the amount of original issue discount, issue date, yield to maturity, comparable yield and projected payment schedule by submitting a written request for it to the Company at the following address: American Electric Power, Investor Relations, One Riverside Plaza, Columbus, Ohio 43215. The Senior Notes are not entitled to any sinking fund. The Senior Notes that are a component of Equity Units or that so elect under Section 1.7 of the Indenture will be subject to Remarketing and, in the case of a Failed Remarketing, the Collateral Agent for the benefit of the Company reserves all of its rights as a secured party of the Pledged Notes with respect thereto and, subject to applicable law and Section 5.4 of the Forward Purchase Contract Agreement, may, among other things, permit the Company to cause the Senior Notes to be sold or to retain and cancel such Senior Notes, in either case, in full satisfaction of the Holders' obligations under the Forward Purchase Contracts. A-6 If an Event of Default with respect to the Senior Notes shall occur and be continuing, the principal of the Senior Notes may be declared due and payable in the manner and with the effect provided in the Indenture. The Senior Indenture provides that in certain circumstances such declaration and its consequences may be waived by the Holders of a majority in aggregate principal amount of the Senior Notes then Outstanding. However, any such consent or waiver by the Holder shall not affect any subsequent default or impair any right consequent thereon. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the Holders of not less than a majority in aggregate principal amount of the Securities of all series affected by such supplemental indenture or indentures at the time outstanding voting as one class, as defined in the Indenture, to execute supplemental indentures for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or of modifying in any manner the rights of the Holders of the Securities; provided, however, that no such supplemental indenture shall (i) extend the fixed maturity of any Securities of any series, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof, or reduce the amount of the principal of a Discount Security that would be due and payable upon a declaration of acceleration of the maturity thereof pursuant to the Indenture, without the consent of the holder of each Senior Note then outstanding and affected; (ii) reduce the aforesaid percentage of Senior Notes, the holders of which are required to consent to any such supplemental indenture, or reduce the percentage of Senior Notes, the holders of which are required to waive any default and its consequences, without the consent of the holder of each Senior Note then outstanding and affected thereby; or (iii) modify any provision of Section 6.01(c) of the Indenture (except to increase the percentage of principal amount of securities required to rescind and annul any declaration of amounts due and payable under the Senior Notes), without the consent of the holder of each Senior Note then outstanding and affected thereby. The Indenture also contains provisions permitting the Holders of a majority in aggregate principal amount of the Senior Notes of any series at the time outstanding affected thereby, on behalf of the Holders of the Senior Notes of such series, to waive any past default in the performance of any of the covenants contained in the Indenture, or established pursuant to the Indenture with respect to such series, and its consequences, except a default in the payment of the principal of or premium, if any, or interest on any of the Notes of such series. Any such consent or waiver by the registered Holder of this Note (unless revoked as provided in the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and owners of this Note and of any Note issued in exchange herefor or in place hereof (whether by registration of transfer or otherwise), irrespective of whether or not any notation of such consent or waiver is made upon this Note. Restrictive Covenants Limitation upon Liens of Certain Subsidiaries For so long as any Senior Notes of this series remain outstanding, the Company will not create or incur or allow any of its subsidiaries to create or incur any pledge or security interest on any of the capital stock of a Public Utility Subsidiary held by the Company or one of its subsidiaries or a Significant Subsidiary. A-7 For purposes of this covenant: (i) Public Utility Subsidiary means, at any particular time, a direct or indirect subsidiary of the Company that, as a substantial part of its business, distributes or transmits electric energy to retail or wholesale customers at rates or tariffs that are regulated by either a state or Federal regulatory authority. (ii) Significant Subsidiary means, at any particular time, any direct subsidiary of ours whose consolidated gross assets or consolidated gross revenues (having regard to the Company's direct beneficial interest in the shares, or the like, of that subsidiary) represent at least 25% of the Company's consolidated gross assets or consolidated gross revenues appearing in the most recent audited financial statements of the Company as of the date of determination. Limitation upon Mergers, Consolidations and Sale of Assets The provisions of Article Ten of the Indenture shall be applicable to the Senior Notes of this series. The Indenture contains provisions for defeasance of (a) the entire indebtedness evidenced by this Senior Note and (b) certain restrictive covenants upon compliance by the Company with certain conditions set forth therein; provided, however, Section 11.01 of the Original Indenture shall not apply to the Senior Notes. No reference herein to the Indenture and no provision of this Senior Note or of the Indenture shall alter or impair the obligation of the Company, which are absolute and unconditional, to pay the principal of (and premium, if any) and interest, if any, on this Senior Note at the times, places and rates, and in the coin or currency, herein prescribed. The Senior Notes of this series are issuable only in registered form without coupons in minimum denominations of $50 or any integral multiple of $50 over such minimum denomination. At the Office or Agency of the Company or at the Office of the Agent in The City of New York referred to on the face hereof and as provided in the Indenture and subject to certain limitations therein set forth, the Senior Notes are exchangeable for a like aggregate principal amount of Senior Notes and of like tenor of a difference authorized denomination, as requested by the Holder surrendering the same. As provided in the Indenture and subject to certain limitations therein set forth, this Senior Note is transferable by the registered holder hereof on the Security Register of the Company, upon surrender of this Senior Note for registration of transfer at the office or agency of the Company as may be designated by the Company accompanied by a written instrument or instruments of transfer in form satisfactory to the Company or the Trustee duly executed by the registered Holder hereof or his or her attorney duly authorized in writing, and thereupon one or more new Senior Notes of authorized denominations and for the same aggregate principal amount and series will be issued to the designated transferee or transferees. No service charge will be made for any such transfer, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in relation thereto. A-8 Prior to due presentment of this Senior Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Senior Note is registered as the owner hereof for all purposes, whether or not this Senior Note be overdue and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. No recourse shall be had for the payment of the principal of or the interest on this Senior Note, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture, or any indenture supplement thereto, against any incorporator, stockholder, officer or director, past, present or future, as such, of the Company or of any predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released. THIS SENIOR NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE. All terms used in this Senior Note (and not otherwise defined in this Senior Note) that are defined in the Indenture, the Forward Purchase Contract Agreement, the Remarketing Agreement or the Pledge Agreement, as the case may be, shall have the meanings assigned to them in the Indenture, the Forward Purchase Contract Agreement, the Remarketing Agreement or the Pledge Agreement, as the case may be and as the context may require. A-9 FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto _____________________________________________________________________________. (please insert Social Security or other identifying number of assignee) _____________________________________________________________________________. _____________________________________________________________________________. _____________________________________________________________________________. PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF ASSIGNEE the within Senior Note and all rights thereunder, hereby irrevocably constituting and appointing _____________________________________________________________________________. _____________________________________________________________________________. _____________________________________________________________________________. _____________________________________________________________________________. _____________________________________________________________________________. _____________________________________________________________________________. agent to transfer said Senior Note on the books of the Company, with full power of substitution in the premises. Dated:_______________ __, ______ ____________________________ NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular without alteration or enlargement, or any change whatever. [TO BE ATTACHED TO GLOBAL CERTIFICATES AND PLEDGED NOTES] SCHEDULE OF INCREASES OR DECREASES The following increases or decreases in this [Global Certificate] [Pledged Note] have been made:
________________________________________________________________________________________________________________________ ======================================================================================================================== Principal amount of Amount of decrease Amount of increase in Senior Notes in principal amount principal amount of evidenced by the of Senior Notes Senior Notes [Global Certificate] Signature of evidenced by the evidenced by the [Pledged Note] authorized signatory [Global Certificate] [Global Certificate] following such of Trustee or Date [Pledged Note] [Pledged Note] decrease or increase Collateral Agent ======================================================================================================================== ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________ ========================================================================================================================
EX-4.3 7 dex43.txt EXHIBIT 4.3 Exhibit 4.3 AMERICAN ELECTRIC POWER COMPANY, INC., THE BANK OF NEW YORK, as Collateral Agent, Custodial Agent and Securities Intermediary AND THE BANK OF NEW YORK as Forward Purchase Contract Agent PLEDGE AGREEMENT Dated as of June 11, 2002 TABLE OF CONTENTS
Page ---- ARTICLE I DEFINITIONS SECTION 1.1 Definitions...................................................... 2 ARTICLE II PLEDGE; CONTROL AND PERFECTION SECTION 2.1 The Pledge....................................................... 4 SECTION 2.2 Control and Perfection........................................... 6 ARTICLE III PAYMENTS ON PLEDGED COLLATERAL SECTION 3.1 Payments......................................................... 8 SECTION 3.2 Application of Payments.......................................... 9 ARTICLE IV SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF NOTES SECTION 4.1 Collateral Substitution and the Creation of Stripped Units....... 9 SECTION 4.2 Collateral Substitution and the Re-Creation of Equity Units...... 10 SECTION 4.3 Termination Event................................................ 11 SECTION 4.4 Early Settlement; Merger Early Settlement; Cash Settlement. ..... 11 SECTION 4.5 Remarketing; Application of Proceeds; Settlement................. 12 ARTICLE V VOTING RIGHTS-- NOTES SECTION 5.1 Exercise by Forward Purchase Contract Agent...................... 15 ARTICLE VI RIGHTS AND REMEDIES; TAX EVENT REDEMPTION SECTION 6.1 Rights and Remedies of the Collateral Agent...................... 15 SECTION 6.2 Substitutions.................................................... 16 SECTION 6.3 Tax Event Redemption............................................. 17 ARTICLE VII REPRESENTATIONS AND WARRANTIES; COVENANTS SECTION 7.1 Representations and Warranties................................... 17 SECTION 7.2 Covenants........................................................ 18
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ARTICLE VIII THE COLLATERAL AGENT SECTION 8.1 Appointment, Powers and Immunities............................... 18 SECTION 8.2 Instructions of the Company...................................... 20 SECTION 8.3 Reliance......................................................... 20 SECTION 8.4 Rights in Other Capacities....................................... 21 SECTION 8.5 Non-Reliance on Collateral Agent................................. 21 SECTION 8.6 Compensation and Indemnity....................................... 21 SECTION 8.7 Failure to Act................................................... 22 SECTION 8.8 Resignation...................................................... 23 SECTION 8.9 Right to Appoint Agent or Advisor................................ 24 SECTION 8.10 Survival......................................................... 24 SECTION 8.11 Exculpation...................................................... 24 ARTICLE IX AMENDMENT SECTION 9.1 Amendment Without Consent of Holders............................. 25 SECTION 9.2 Amendment with Consent of Holders................................ 25 SECTION 9.3 Execution of Amendments.......................................... 26 SECTION 9.4 Effect of Amendments............................................. 26 SECTION 9.5 Reference to Amendments.......................................... 26 ARTICLE X MISCELLANEOUS SECTION 10.1 No Waiver........................................................ 27 SECTION 10.2 GOVERNING LAW.................................................... 27 SECTION 10.3 Notices.......................................................... 27 SECTION 10.4 Successors and Assigns........................................... 28 SECTION 10.5 Counterparts..................................................... 28 SECTION 10.6 Severability..................................................... 28 SECTION 10.7 Expenses, Etc.................................................... 28 SECTION 10.8 Security Interest Absolute....................................... 29 SECTION 10.9 Waiver of Jury Trial............................................. 29 EXHIBIT A Instruction from Forward Purchase Contract Agent to Collateral Agent EXHIBIT B Instruction to Forward Purchase Contract Agent EXHIBIT C Instruction to Custodial Agent Regarding Remarketing EXHIBIT D Instruction to Custodial Agent Regarding Withdrawal from Remarketing
-ii- PLEDGE AGREEMENT PLEDGE AGREEMENT, dated as of June 11, 2002 (this "Agreement"), among American Electric Power Company, Inc., a New York corporation (the "Company"), The Bank of New York, a New York banking corporation, not individually but solely as collateral agent (in such capacity, together with its successors in such capacity, the "Collateral Agent"), as custodial agent (in such capacity, together with its successors in such capacity, the "Custodial Agent") and as "securities intermediary" as defined in Section 8-102(a)(14) of the Code (as defined herein) (in such capacity, together with its successors in such capacity, the "Securities Intermediary"), and The Bank of New York, not individually but solely as forward purchase contract agent and as attorney-in-fact of the Holders from time to time of the Equity Units and Stripped Units (in such capacity, together with its successors in such capacity, the "Forward Purchase Contract Agent") under the Forward Purchase Contract Agreement (as defined herein). RECITALS WHEREAS, the Company and the Forward Purchase Contract Agent are parties to the Forward Purchase Contract Agreement, dated as of the date hereof (as modified and supplemented and in effect from time to time, the "Forward Purchase Contract Agreement"), pursuant to which there may be issued 6,000,000 Equity Units of the Company (or 6,900,000 Equity Units if the Underwriters exercise their over-allotment option in full) each having a Stated Amount of $50 per Unit, all of which will initially be Equity Units. WHEREAS, each Equity Unit will be comprised of (a) a Forward Purchase Contract and (b) either beneficial ownership of (i) a Note, (ii) following the successful remarketing of the Notes in accordance with the Forward Purchase Contract Agreement and the Remarketing Agreement, the appropriate Treasury Consideration or (iii) following a Tax Event Redemption in accordance with the Forward Purchase Contract Agreement, an Applicable Ownership Interest in the Treasury Portfolio. WHEREAS, in accordance with the terms of the Forward Purchase Contract Agreement, a Holder of Equity Units may separate the Notes from the related Forward Purchase Contracts by substituting for such Notes Treasury Securities that will pay in the aggregate an amount equal to the amount due on the Stock Purchase Date under such Forward Purchase Contracts. Upon such separation, the Equity Units will become Stripped Units. Each Stripped Unit will be comprised of (a) a Forward Purchase Contract and (b) a 1/20 undivided beneficial interest in a Treasury Security. WHEREAS, pursuant to the terms of the Forward Purchase Contract Agreement and the Forward Purchase Contracts, the Holders, from time to time, of the Equity Units and Stripped Units have irrevocably authorized the Forward Purchase Contract Agent, as attorney-in-fact of such Holders, among other things, to execute and deliver this Agreement on behalf of such Holders and to grant the plIedge provided hereby of the Notes, any Treasury Consideration, any Treasury Securities and any Applicable Ownership Interest in the Treasury Portfolio delivered in exchange therefor to secure each Holder's obligations under the related Forward Purchase Contracts, as provided herein and subject to the terms hereof. NOW, THEREFORE, the Company, the Collateral Agent, the Securities Intermediary, the Custodial Agent and the Forward Purchase Contract Agent, on its own behalf and as attorney-in-fact of the Holders from time to time of the Equity Units and Stripped Units, agree as follows: ARTICLE I DEFINITIONS SECTION 1.1 Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) capitalized terms used but not defined herein are used as defined in the Forward Purchase Contract Agreement; (b) the defined terms in this Agreement have the meanings assigned to them in this Article and include the plural as well as the singular; and (c) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision. "Agreement" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more agreements supplemental hereto entered into pursuant to the applicable provisions hereof. "Code" has the meaning specified in Section 6.1(a) hereof. "Collateral" has the meaning specified in Section 2.1(a) hereof. "Collateral Account" means the securities account (number _________) maintained at ______________________ in the name "The Bank of New York, a New York banking corporation, as Forward Purchase Contract Agent on behalf of the holders of certain securities of American Electric Power Company, Inc., Collateral Account subject to the American Electric Power Company, Inc., as pledgee" and any successor account. "Collateral Agent" has the meaning specified in the first paragraph of this Agreement. "Company" means the Person named as the "Company" in the first paragraph of this Agreement until a successor shall have become such pursuant to the applicable 2 provisions of the Forward Purchase Contract Agreement, and thereafter "Company" shall mean such successor. "Custodial Agent" has the meaning specified in the first paragraph of this Agreement. "Forward Purchase Contract Agent" has the meaning specified in the first paragraph of this Agreement. "Forward Purchase Contract Agreement" has the meaning specified in the Recitals. "Intermediary" means any entity that in the ordinary course of its business maintains securities accounts for others and is acting in that capacity. "Pledge" has the meaning specified in Section 2.1(c) hereof. "Pledged Applicable Ownership Interest in the Treasury Portfolio" has the meaning specified in Section 2.1(c) hereof. "Pledged Notes" has the meaning specified in Section 2.1(c) hereof. "Pledged Treasury Consideration" has the meaning specified in Section 2.1(c) hereof. "Pledged Treasury Securities" has the meaning specified in Section 2.1(c) hereof. "Proceeds" means all interest, dividends, cash, instruments, securities, financial assets (as defined in Section 8-102(a)(9) of the Code) and other property from time to time received, receivable or otherwise distributed upon the sale, exchange, collection or disposition of the Collateral or any proceeds thereof. "Securities Intermediary" has the meaning specified in the first paragraph of this Agreement. "Security Entitlement" has the meaning specified in Section 8-102(a)(17) of the Code. "Separate Notes" means any Notes that are not Pledged Notes. "Supplemental Indenture" means that third supplemental indenture dated as of June 11, 2002, between the Company and The Bank of New York, as trustee (the "Trustee"), to the indenture dated as of May 1, 2001, between the Company and the Trustee. "Tax Event Redemption Date" means the date upon which a Tax Event Redemption is to occur. 3 "TRADES Regulations" means the regulations of the United States Department of the Treasury, published at 31 C.F.R. Part 357, as amended from time to time. Unless otherwise defined herein, all terms defined in the TRADES Regulations are used herein as therein defined. "Transfer" means, with respect to the Collateral and in accordance with the instructions of the Collateral Agent, the Forward Purchase Contract Agent or the Holder, as applicable: (i) in the case of Collateral consisting of securities which cannot be delivered by book-entry or which the parties agree are to be delivered in physical form, delivery in appropriate physical form to the recipient accompanied by any duly executed instruments of transfer, assignments in blank, transfer tax stamps and any other documents necessary to constitute a legally valid transfer to the recipient; (ii) in the case of Collateral consisting of securities maintained in book-entry form, delivery by causing a "securities intermediary" (as defined in Section 8-102(a)(14) of the Code) to (a) credit a "security entitlement" (as defined in Section 8-102(a)(17) of the Code) with respect to such securities to a "securities account" (as defined in Section 8-501(a) of the Code) maintained by or on behalf of the recipient and (b) to issue a confirmation to the recipient with respect to such credit. In the case of Collateral to be delivered to the Collateral Agent, the securities intermediary shall be the Securities Intermediary and the securities account shall be the Collateral Account. In addition, any Transfer of Treasury Securities and Treasury Consideration hereunder shall be made in accordance with the TRADES Regulations and other applicable law. ARTICLE II PLEDGE; CONTROL AND PERFECTION SECTION 2.1 The Pledge. (a) The Holders from time to time acting through the Forward Purchase Contract Agent, as their attorney-in-fact, and the Forward Purchase Contract Agent, as such attorney-in-fact, hereby pledge and grant to the Collateral Agent, for the benefit of the Company, as collateral security for the performance when due by such Holders of their respective obligations under the related Forward Purchase Contracts, a security interest in all of the right, title and interest of the Forward Purchase Contract Agent and such Holders in: (i) (A) the Notes, Treasury Consideration, Treasury Securities and any Applicable Ownership Interest in the Treasury Portfolio constituting a part of the Equity Units or Stripped Units, (B) any Treasury Securities delivered in exchange for any Notes in accordance with Section 4.1 hereof, and (C) any Notes delivered 4 in exchange for any Treasury Securities in accordance with Section 4.2 hereof, in each case that have been Transferred to or otherwise received by the Collateral Agent and not released by the Collateral Agent to such Holders under the provisions of this Agreement; (ii) the Collateral Account and all securities, financial assets, security entitlements, cash and other property credited thereto and all Security Entitlements related thereto; and (iii) all Proceeds of the foregoing (all of the foregoing, collectively, the "Collateral"). (b) Prior to or concurrently with the execution and delivery of this Agreement, the Forward Purchase Contract Agent, on behalf of the initial Holders of the Equity Units, shall cause the Notes comprising a part of the Equity Units to be Transferred to the Collateral Agent for the benefit of the Company. (c) The pledge provided in this Section 2.1 is herein referred to as the "Pledge" and the Notes (or the Notes that are delivered pursuant to Section 4.2 hereof), Treasury Consideration, Treasury Securities or Applicable Ownership Interest in the Treasury Portfolio subject to the Pledge, excluding any Notes or Treasury Securities released from the Pledge as provided in Sections 4.1, 4.2 and 4.3 hereof, respectively, are herein referred to as "Pledged Notes," "Pledged Treasury Consideration," "Pledged Treasury Securities" or "Pledged Applicable Ownership Interest in the Treasury Portfolio," respectively. Subject to the Pledge and Section 2.2 hereof, the Holders from time to time shall have full beneficial ownership of the Collateral. For purposes of perfecting the Pledge under applicable law, including, to the extent applicable, the TRADES Regulations or the Uniform Commercial Code as adopted and in effect in any applicable jurisdiction, the Collateral Agent shall be the agent of the Company as provided herein. Whenever directed by the Collateral Agent acting on behalf of the Company, the Securities Intermediary shall have the right to reregister in its name the Notes or any other securities held in physical form. (d) Except as may be required in order to release Notes in connection with a Tax Event Redemption or with a Holder's election to convert Equity Units to Stripped Units, or except as otherwise required to release Notes as specified herein, neither the Collateral Agent, the Custodial Agent nor the Securities Intermediary shall relinquish physical possession of any certificate evidencing a Note prior to the termination of this Agreement. If it becomes necessary for the Securities Intermediary to relinquish physical possession of a certificate in order to release a portion of the Notes evidenced thereby from the Pledge, the Company or the Forward Purchase Contract Agent shall use its commercially reasonable best efforts to arrange for the Securities Intermediary to obtain physical possession of a replacement certificate evidencing any Notes remaining subject to the Pledge hereunder registered to the Securities Intermediary or endorsed in blank within fifteen days of the date the Securities Intermediary relinquished possession. The Securities Intermediary shall promptly notify the Company and the Collateral Agent of 5 the Securities Intermediary's failure to obtain possession of any such replacement certificate as required hereby. SECTION 2.2 Control and Perfection. (a) In connection with the Pledge granted in Section 2.1, and subject to the other provisions of this Agreement, the Holders from time to time acting through the Forward Purchase Contract Agent, as their attorney-in-fact, hereby authorize and direct the Securities Intermediary (without the necessity of obtaining the further consent of the Forward Purchase Contract Agent or any of the Holders), and the Securities Intermediary agrees, to comply with and follow any instructions and entitlement orders (as defined in Section 8-102(a)(8) of the Code) that the Collateral Agent may deliver with respect to the Collateral Account, the Collateral credited thereto and any Security Entitlements with respect thereto. In the event the Securities Intermediary receives from the Holders or the Forward Purchase Contract Agent entitlement orders which conflict with entitlement orders received from the Collateral Agent, the Securities Intermediary shall follow the entitlement orders received from the Collateral Agent. Such instructions and entitlement orders may, without limitation, direct the Securities Intermediary to transfer, redeem, assign, or otherwise deliver the Notes, the Treasury Consideration, the Treasury Securities, any Applicable Ownership Interest in the Treasury Portfolio and any Security Entitlements with respect thereto or sell, liquidate or dispose of such assets through a broker designated by the Company, and to pay and deliver any income, proceeds or other funds derived therefrom to the Company. The Holders from time to time acting through the Forward Purchase Contract Agent hereby further authorize and direct the Collateral Agent itself, as agent of the Company, to issue instructions and entitlement orders, and to otherwise take action, with respect to the Collateral Account, the Collateral credited thereto and any Security Entitlements with respect thereto, pursuant to the terms and provisions hereof, all without the necessity of obtaining the further consent of the Forward Purchase Contract Agent or any of the Holders. The Collateral Agent shall be the agent of the Company and shall act only in accordance with the terms hereof. Without limiting the generality of the foregoing, the Collateral Agent shall issue entitlement orders to the Securities Intermediary as directed in writing by the Company. (b) The Securities Intermediary hereby confirms and agrees that: (i) all securities or other property underlying any financial assets credited to the Collateral Account shall be registered in the name of the Securities Intermediary, or its nominee, endorsed to the Securities Intermediary, or its nominee, or in blank and in no case will any financial asset credited to the Collateral Account be registered in the name of the Forward Purchase Contract Agent, the Collateral Agent as such, the Company or any Holder, payable to the order of, or specially endorsed to, the Forward Purchase Contract Agent, the Collateral Agent as such, the Company or any Holder except to the extent the foregoing have been specially endorsed to the Securities Intermediary or in blank; 6 (ii) all property delivered to the Securities Intermediary pursuant to this Agreement (including, without limitation, any Notes, Treasury Consideration, Treasury Securities or Applicable Ownership Interest in the Treasury Portfolio) will be promptly credited to the Collateral Account; (iii) the Collateral Account is an account to which financial assets are or may be credited, and the Securities Intermediary shall, subject to the terms of this Agreement, treat the Forward Purchase Contract Agent as entitled to exercise the rights of any financial asset credited to the Collateral Account; (iv) the Securities Intermediary has not entered into, and until the termination of this Agreement will not enter into, any agreement with any other Person relating to the Collateral Account and/or any financial assets credited thereto pursuant to which it has agreed to comply with entitlement orders (as defined in Section 8-102(a)(8) of the Code) of such other Person; (v) the Securities Intermediary has not entered into, and until the termination of this Agreement will not enter into, any agreement with the Company, the Collateral Agent or the Forward Purchase Contract Agent purporting to limit or condition the obligation of the Securities Intermediary to comply with entitlement orders as set forth in this Section 2.2; (vii) each item of property (whether investment property, financial asset, security, instrument or cash) credited to the Collateral Account shall be treated as a "financial asset" within the meaning of Section 8-102(a)(9) of the Code; and (vii) in the event of any conflict between this Agreement (or any portion thereof) and any other agreement now existing or hereafter entered into, the terms of this Agreement shall prevail. (c) The Forward Purchase Contract Agent hereby irrevocably constitutes and appoints the Collateral Agent and the Company, with full power of substitution, as the Forward Purchase Contract Agent's attorney-in-fact to take on behalf of, and in the name, place and stead of, the Forward Purchase Contract Agent and the Holders, any action necessary or desirable to perfect and to keep perfected the security interest in the Collateral referred to in Section 2.1. The grant of such power-of-attorney shall not be deemed to require of the Collateral Agent any specific duties or obligations not otherwise assumed by the Collateral Agent hereunder. Notwithstanding the foregoing, in no event shall the Collateral Agent or Securities Intermediary be responsible for the preparation or filing of any financing or continuation statements in the appropriate jurisdictions or responsible for maintenance or perfection of any security interest hereunder. (d) The Forward Purchase Contract Agent shall file with the Internal Revenue Service and deliver to the Holders Forms 1099 (or successor or comparable forms), to the extent required by law, with respect to payments by the Holders. Neither the Securities Intermediary nor the Collateral Agent shall have any tax reporting duties hereunder. 7 ARTICLE III PAYMENTS ON PLEDGED COLLATERAL SECTION 3.1 Payments. So long as the Forward Purchase Contract Agent is the registered owner of the Pledged Notes, Pledged Treasury Consideration, Pledged Applicable Ownership Interest in the Treasury Portfolio or Pledged Treasury Securities, it shall receive all payments thereon. If the Pledged Notes are reregistered, such that the Collateral Agent becomes the registered holder, all payments of the principal of, or interest or other amounts on, the Pledged Notes and all payments of the principal of, or cash distributions on, any Pledged Treasury Consideration, Pledged Treasury Securities or Pledged Applicable Ownership Interest in the Treasury Portfolio that are received by the Collateral Agent and that are properly payable hereunder, shall be paid by the Collateral Agent by wire transfer in same day funds: (i) in the case of (A) any interest payments with respect to the Pledged Notes, the Pledged Treasury Consideration or the appropriate Pledged Applicable Ownership Interest in the Treasury Portfolio (as specified in clause (B) of the definition of Applicable Ownership Interest), as the case may be, with respect to Equity Units which include Pledged Notes, Pledged Treasury Consideration or the appropriate Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may be, and (B) any payments of principal or, if applicable, the appropriate Applicable Ownership Interest in the Treasury Portfolio (as specified in clause (A) of the definition of Applicable Ownership Interest) with respect to any Notes, Treasury Consideration or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be, that have been released from the Pledge pursuant to Section 4.3 hereof, to the Forward Purchase Contract Agent, for the benefit of the relevant Holders of the Equity Units, to the account designated by the Forward Purchase Contract Agent for such purpose, no later than 10:00 a.m., New York City time, on the Business Day such payment is received by the Collateral Agent (provided that in the event such payment is received by the Collateral Agent on a day that is not a Business Day or after 9:00 a.m., New York City time, on a Business Day, then such payment shall be made no later than 9:30 a.m., New York City time, on the next succeeding Business Day); (ii) in the case of any payments with respect to any Treasury Securities that have been released from the Pledge pursuant to Section 4.3 hereof, to the Holders of the Stripped Units to the accounts designated by them in writing for such purpose no later than 2:00 p.m., New York City time, on the Business Day such payment is received by the Collateral Agent (provided that in the event such payment is received by the Collateral Agent on a day that is not a Business Day or after 10:00 a.m., New York City time, on a Business Day, then such payment 8 shall be made no later than 10:30 a.m., New York City time, on the next succeeding Business Day); and (iii) in the case of payments in respect of any Pledged Notes, Pledged Treasury Consideration, Pledged Treasury Securities or the appropriate Pledged Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio, as the case may be, to be paid upon settlement of the Holders' obligations to purchase Common Stock under the Forward Purchase Contract, to the Company on the Stock Purchase Date in accordance with the procedure set forth in Section 4.5(a) or 4.5(b) hereof, in full satisfaction of the respective obligations of the Holders under the related Forward Purchase Contracts. SECTION 3.2 Application of Payments. All payments received by the Forward Purchase Contract Agent as provided herein shall be applied by the Forward Purchase Contract Agent pursuant to the provisions of the Forward Purchase Contract Agreement. If, notwithstanding the foregoing, the Forward Purchase Contract Agent shall receive any payments of principal on account of any Note, Treasury Consideration or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio, as applicable, that, at the time of such payment, is a Pledged Note, Pledged Treasury Consideration or Pledged Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio, as the case may be, or a Holder of Stripped Units shall receive any payments of principal on account of any Treasury Securities that, at the time of such payment, are Pledged Treasury Securities, the Forward Purchase Contract Agent or such Holder shall hold the same as trustee of an express trust for the benefit of the Company (and promptly deliver the same over to the Company) for application to the obligations of the Holders under the related Forward Purchase Contracts, and the Holders shall acquire no right, title or interest in any such payments of principal so received. ARTICLE IV SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF NOTES SECTION 4.1 Collateral Substitution and the Creation of Stripped Units. Unless a successful remarketing or a Tax Event Redemption has occurred, at any time on or prior to the tenth Business Day immediately preceding the Stock Purchase Date, a Holder of Equity Units shall have the right to substitute Treasury Securities for the Pledged Notes securing such Holder's obligations under the Forward Purchase Contracts comprising a part of such Equity Units, in integral multiples of 20 Equity Units by (a) Transferring to the Collateral Agent Treasury Securities having an aggregate principal amount equal to the aggregate Stated Amount of such Equity Units and (b) delivering such Equity Units to the Forward Purchase Contract Agent, accompanied by a 9 notice, substantially in the form of Exhibit B hereto, to the Forward Purchase Contract Agent stating that such Holder has Transferred Treasury Securities to the Collateral Agent pursuant to clause (a) above (stating the principal amount and the CUSIP numbers of the Treasury Securities Transferred by such Holder) and requesting that the Forward Purchase Contract Agent instruct the Collateral Agent to release from the Pledge the Pledged Notes related to such Equity Units, whereupon the Forward Purchase Contract Agent shall promptly give such instruction in writing to the Collateral Agent in the form provided in Exhibit A; provided that such Holder may not substitute such Treasury Securities for such Pledged Notes pursuant to this Section 4.1 during the period from four Business Days prior to any Remarketing Period until the expiration of three Business Days after the end of such Remarketing Period. Upon receipt of Treasury Securities from a Holder of Equity Units and the related written instruction from the Forward Purchase Contract Agent, the Collateral Agent shall release the Pledged Notes and shall promptly Transfer such Pledged Notes free and clear of any lien, pledge or security interest created hereby, to the Forward Purchase Contract Agent. All items Transferred and/or substituted by any Holder pursuant to this Section 4.1, Section 4.2 or any other Section of this Agreement shall be Transferred and/or substituted free and clear of all liens, claims and encumbrances. SECTION 4.2 Collateral Substitution and the Re-Creation of Equity Units. Unless a successful remarketing or a Tax Event Redemption has occurred, at any time on or prior to the tenth Business Day immediately preceding the Stock Purchase Date, a Holder of Stripped Units shall have the right to reestablish Equity Units consisting of the Forward Purchase Contracts and Notes in integral multiples of 20 Equity Units by (x) Transferring to the Collateral Agent Notes having an aggregate principal amount equal to the aggregate stated amount of such Stripped Units and (y) delivering such Stripped Units to the Forward Purchase Contract Agent, accompanied by a notice, substantially in the form of Exhibit B hereto, to the Forward Purchase Contract Agent stating that such Holder has Transferred Notes to the Collateral Agent pursuant to clause (x) above and requesting that the Forward Purchase Contract Agent instruct the Collateral Agent to release from the Pledge the Pledged Treasury Securities related to such Stripped Units, whereupon the Forward Purchase Contract Agent shall give such instruction to the Collateral Agent in the form provided in Exhibit A; provided that such Holder of Stripped Units shall not have the right to reestablish Equity Units pursuant to this Section 4.2 during the period from four Business Days prior to any Remarketing Period until the expiration of three Business Days after the end of such Remarketing Period. Upon receipt of the Notes from such Holder and the instruction from the Forward Purchase Contract Agent, the Collateral Agent shall release the Pledged Treasury Securities and shall promptly Transfer such Pledged Treasury Securities, free and clear of any lien, pledge or security interest created hereby, to the Forward Purchase Contract Agent. 10 SECTION 4.3 Termination Event. (a) Upon receipt by the Collateral Agent of written notice from the Company or the Forward Purchase Contract Agent that there has occurred a Termination Event, the Collateral Agent shall release all Collateral from the Pledge and shall promptly Transfer any Pledged Notes, Pledged Treasury Consideration or Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may be, and Pledged Treasury Securities to the Forward Purchase Contract Agent for the benefit of the Holders of the Equity Units and the Stripped Units, respectively, free and clear of any lien, pledge or security interest or other interest created hereby. (b) If such Termination Event shall result from the Company's becoming a debtor under the Bankruptcy Code, and if the Collateral Agent shall for any reason fail promptly to effectuate the release and Transfer of all Pledged Notes, Pledged Treasury Consideration, Pledged Applicable Ownership Interest in the Treasury Portfolio, or Pledged Treasury Securities, as the case may be, as provided by this Section 4.3, the Forward Purchase Contract Agent shall: (i) use its best efforts to obtain, at the expense of the Company, an opinion of a nationally recognized law firm reasonably acceptable to the Collateral Agent to the effect that, as a result of the Company's being the debtor in such a bankruptcy case, the Collateral Agent will not be prohibited from releasing or Transferring the Collateral as provided in this Section 4.3, and shall deliver such opinion to the Collateral Agent within ten days after the occurrence of such Termination Event, and if (y) the Forward Purchase Contract Agent shall be unable to obtain such opinion within ten days after the occurrence of such Termination Event or (z) the Collateral Agent shall continue, after delivery of such opinion, to refuse to effectuate the release and Transfer of all Pledged Notes, Pledged Treasury Consideration, Pledged Applicable Ownership Interest in the Treasury Portfolio or Pledged Treasury Securities, as the case may be, as provided in this Section 4.3, then the Forward Purchase Contract Agent shall within fifteen days after the occurrence of such Termination Event commence an action or proceeding in the court with jurisdiction of the Company's case under the Bankruptcy Code seeking an order requiring the Collateral Agent to effectuate the release and Transfer of all Pledged Notes, Pledged Treasury Consideration, Pledged Applicable Ownership Interest in the Treasury Portfolio or Pledged Treasury Securities, as the case may be, as provided by this Section 4.3 or (ii) commence an action or proceeding like that described in subsection (i)(z) hereof within ten days after the occurrence of such Termination Event. SECTION 4.4 Early Settlement; Merger Early Settlement; Cash Settlement. Upon written notice to the Collateral Agent by the Forward Purchase Contract Agent that one or more Holders of Equity Units or Stripped Units have elected to effect 11 Early Settlement, Merger Early Settlement or Cash Settlement of their respective obligations under the Forward Purchase Contracts forming a part of such Equity Units or Stripped Units in accordance with the terms of the Forward Purchase Contracts and the Forward Purchase Contract Agreement (setting forth the number of such Forward Purchase Contracts as to which such Holders have elected to effect Early Settlement, Merger Early Settlement or Cash Settlement), and that the Collateral Agent has received from such Holders, and paid to the Company, the related Early Settlement Amounts, Merger Early Settlement Amounts or Cash Settlement Amounts, as the case may be, pursuant to the terms of the Forward Purchase Contracts and the Forward Purchase Contract Agreement and that all conditions to such Early Settlement, Merger Early Settlement or Cash Settlement, as the case may be, have been satisfied, then the Collateral Agent shall release from the Pledge (a) Pledged Notes, Pledged Treasury Consideration or Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may be, in the case of a Holder of Equity Units or (b) Pledged Treasury Securities, in the case of a Holder of Stripped Units, relating to such Forward Purchase Contracts as to which such Holders have elected to effect Early Settlement, Merger Early Settlement or Cash Settlement, and shall Transfer all such Pledged Notes, Pledged Treasury Consideration, Pledged Applicable Ownership Interest in the Treasury Portfolio or Pledged Treasury Securities, as the case may be, free and clear of the Pledge created hereby, to the Forward Purchase Contract Agent for the benefit of such Holders. SECTION 4.5 Remarketing; Application of Proceeds; Settlement. (a) Pursuant to the Forward Purchase Contract Agreement, the Forward Purchase Contract Agent shall notify, by 10:00 a.m., New York City time, on the third Business Day preceding the Remarketing Date or the first day of any subsequent Remarketing Period, as the case may be, the Remarketing Agent and the Collateral Agent of the aggregate number of Notes comprising part of Equity Units to be remarketed. The Collateral Agent shall, by 10:00 a.m., New York City time, on the third Business Day immediately preceding the Remarketing Date or the first day of any subsequent Remarketing Period, as the case may be, without any instruction from Holders of Equity Units, Transfer the Pledged Notes to be remarketed to the Remarketing Agent for remarketing. Upon completion of a successful remarketing which occurs prior to the fourth Business Day preceding the Stock Purchase Date, after deducting as the remarketing fee an amount not exceeding 25 basis points (0.25%) of the total proceeds of such remarketing of Pledged Notes, the Remarketing Agent will Transfer the Agent-purchased Treasury Consideration purchased from the proceeds of the remarketing to the Forward Purchase Contract Agent, which shall thereupon Transfer such Agent-purchased Treasury Consideration to the Collateral Agent. Upon receipt of the Agent-purchased Treasury Consideration from the Forward Purchase Contract Agent following a successful remarketing, (i) the Collateral Agent, for the benefit of the Company, shall thereupon hold in the Collateral Account such Agent-purchased Treasury Consideration (as defined in the Forward Purchase Contract Agreement) to secure such Equity Units Holders' obligations under the Forward Purchase Contracts and to fund the quarterly interest payment or payments due to Equity Units Holders on the Stock Purchase Date, 12 and (ii) the remaining portion, if any, of the proceeds of such successful remarketing shall be distributed by the Remarketing Agent to the Forward Purchase Contract Agent for payment to such Equity Units Holders participating in such remarketing. On the Stock Purchase Date, the Collateral Agent shall, at the direction of the Company, (i) apply that portion of the payments received in respect of the Pledged Treasury Consideration equal to the aggregate Stated Amount of the related Equity Units to satisfy in full the obligations of such Equity Units Holders to pay the Purchase Price under the related Forward Purchase Contracts and (ii) apply the remaining portion to pay the quarterly interest payment due to Equity Units Holders on such Stock Purchase Date, which quarterly interest payment shall be paid on the Pledged Notes in an amount equal to the Coupon Rate for such quarterly interest payment. Upon completion of a successful remarketing which occurs on or after the fourth Business Day preceding the Stock Purchase Date, after deducting as the remarketing fee an amount not exceeding 25 basis points (0.25%) of the total proceeds of such remarketing of Pledged Notes, the Remarketing Agent will deliver the proceeds of such remarketing to the Forward Purchase Contract Agent, which shall thereupon deliver such proceeds to the Collateral Agent. Upon receipt of the proceeds from the Forward Purchase Contract Agent following a successful remarketing, (i) the Collateral Agent, for the benefit of the Company, shall thereupon apply such proceeds in direct settlement of the Equity Units Holders' obligations under the Forward Purchase Contracts and (ii) the remaining portion, if any, of the proceeds of such successful remarketing shall be distributed by the Remarketing Agent to the Forward Purchase Contract Agent for payment to such Equity Units Holders participating in such remarketing. (b) The Remarketing Agent shall make one or more attempts to remarket the Notes in accordance with the procedures set forth in the Forward Purchase Contract Agreement and the Remarketing Agreement. If by 4:00 p.m., New York City time, on the third Business Day immediately preceding the Stock Purchase Date, the Remarketing Agent has failed to remarket the Notes at approximately, but not less than, 100.25% of the Remarketing Value (as described in the Forward Purchase Contract Agreement), the Last Failed Remarketing shall be deemed to have occurred. Within three Business Days following the Last Failed Remarketing, the Notes delivered to the Remarketing Agent pursuant to Section 4.5(a) hereof shall be returned to the Collateral Agent, together with written notice from the Remarketing Agent of such Last Failed Remarketing. In this case, the Remarketing Agent shall advise the Collateral Agent in writing that it cannot remarket the related Pledged Notes of such Holders of Equity Units and the Holders of Equity Units that have not made a Cash Settlement, Early Settlement or Merger Early Settlement shall be deemed to have directed the Company to retain or dispose of the Pledged Notes in satisfaction of their obligations under the Forward Purchase Contracts. The Collateral Agent, for the benefit of the Company will, at the written direction of the Company, retain or dispose of the Pledged Notes in accordance with applicable law and satisfy in full, from any such disposition or retention, such Holders' obligations to pay the Purchase Price for the Common Stock; provided, that if upon the Last Failed Remarketing, the Collateral Agent exercises such rights for the benefit of the Company with respect to such Notes, any accrued and unpaid interest on such Notes will become 13 payable by the Company to the Forward Purchase Contract Agent for payment to the Holders of the Equity Units to which such Notes relate in accordance with the Forward Purchase Contract Agreement. (c) In the event a Holder of Stripped Units has not effected a Cash Settlement, Early Settlement or Merger Early Settlement of the Forward Purchase Contracts underlying its Stripped Units, such Holder shall be deemed to have elected to pay for the shares of Common Stock to be issued under such Forward Purchase Contracts from the payments received in respect of the related Pledged Treasury Securities. Without receiving any instruction from any such Holder, the Collateral Agent shall apply such payments to the settlement of such Forward Purchase Contracts on the Stock Purchase Date. In the event the payments received in respect of the related Pledged Treasury Securities are in excess of the aggregate Purchase Price under the Forward Purchase Contracts being settled thereby, the Collateral Agent shall distribute such excess, when received, to the Forward Purchase Contract Agent for the benefit of such Holders of the Stripped Units. (d) On or prior to the fourth Business Day preceding the Remarketing Date or the first day of any subsequent Remarketing Period, but no earlier than the Payment Date immediately preceding the last Payment Date before the Stock Purchase Date, holders of Separate Notes may elect to have their Separate Notes remarketed by Transferring their Separate Notes and delivering a notice of such election, substantially in the form of Exhibit C hereto, to the Custodial Agent. On the third Business Day prior to the Remarketing Date or the first day of any subsequent Remarketing Period, by 10:00 a.m., New York City time, the Custodial Agent shall notify the Remarketing Agent of the number of such Separate Notes to be remarketed. The Custodial Agent will hold such Separate Notes in an account separate from the Collateral Account. A holder of Separate Notes electing to have its Separate Notes remarketed will also have the right to withdraw such election by written notice to the Custodial Agent, substantially in the form of Exhibit D hereto, on or prior to the fourth Business Day immediately preceding the applicable Remarketing Date or first day of a subsequent Remarketing Period, upon which notice the Custodial Agent will return such Separate Notes to such holder. On the third Business Day immediately preceding the Remarketing Date or the first day of any subsequent Remarketing Period, the Custodial Agent at the written direction of the Remarketing Agent will deliver to the Remarketing Agent for remarketing all Separate Notes delivered to the Custodial Agent pursuant to this Section 4.5(d) and not withdrawn pursuant to the terms hereof prior to such date. After deducting as the remarketing fee an amount not exceeding 25 basis points (0.25%) of the total proceeds of such remarketing of such Separate Notes, the Remarketing Agent will remit to the Custodial Agent the portion of the proceeds from such remarketing, if successful, equal to the amount calculated in respect of such Separate Notes as set forth in Section 1.6 of the Supplemental Indenture. If, despite using its commercially reasonable best efforts, the Remarketing Agent advises the Custodial Agent in writing that there has been a Failed Remarketing, the Remarketing Agent will promptly return such Separate Notes to the Custodial Agent for redelivery to such holders of such Separate Notes. 14 ARTICLE V VOTING RIGHTS -- NOTES SECTION 5.1 Exercise by Forward Purchase Contract Agent. Subject to the terms of the Forward Purchase Contract Agreement, the Forward Purchase Contract Agent may exercise, or refrain from exercising, any and all voting and other consensual rights pertaining to the Pledged Notes or any part thereof for any purpose not inconsistent with the terms of this Agreement and in accordance with the terms of the Forward Purchase Contract Agreement; provided, that the Forward Purchase Contract Agent shall not exercise or, as the case may be, shall not refrain from exercising such right if, in the judgment of the Company, such action would impair or otherwise have a material adverse affect on the value of all or any of the Pledged Notes; and provided, further, that the Forward Purchase Contract Agent shall give the Company and the Collateral Agent at least five days' prior written notice of the manner in which it intends to exercise, or its reasons for refraining from exercising, any such right. Upon receipt of any notices and other communications in respect of any Pledged Notes, including notice of any meeting at which holders of Notes are entitled to vote or solicitation of consents, waivers or proxies of holders of Notes, the Collateral Agent shall use reasonable efforts to send promptly to the Forward Purchase Contract Agent such notice or communication, and as soon as reasonably practicable after receipt of a written request therefor from the Forward Purchase Contract Agent, execute and deliver to the Forward Purchase Contract Agent such proxies and other instruments in respect of such Pledged Notes (in form and substance satisfactory to the Collateral Agent) as are prepared by the Forward Purchase Contract Agent with respect to the Pledged Notes. ARTICLE VI RIGHTS AND REMEDIES; TAX EVENT REDEMPTION SECTION 6.1 Rights and Remedies of the Collateral Agent. (a) In addition to the rights and remedies available at law or in equity, after an event of default under the Forward Purchase Contracts, the Collateral Agent shall have all of the rights and remedies with respect to the Collateral of a secured party under the Uniform Commercial Code (or any successor thereto) as in effect in the State of New York from time to time (the "Code") (whether or not the Code is in effect in the jurisdiction where the rights and remedies are asserted) and the TRADES Regulations and such additional rights and remedies to which a secured party is entitled under the laws in effect in any jurisdiction where any rights and remedies hereunder may be asserted. Wherever reference is made in this Agreement to any section of the Code, such reference shall be deemed to include a reference to any provision of the Code, which is a successor to, or amendment of, such section. Without limiting the generality of the foregoing, such remedies may include, to the extent permitted by applicable law, (i) retention of the Pledged Notes or other Collateral in full satisfaction of the Holders' 15 obligations under the Forward Purchase Contracts or (ii) sale of the Pledged Notes or other Collateral in one or more public or private sales, in each case at the written direction of the Company. (b) Without limiting any rights or powers otherwise granted by this Agreement to the Collateral Agent, in the event the Collateral Agent is unable to make payments to the Company on account of any Pledged Treasury Consideration, Pledged Applicable Ownership Interest in the Treasury Portfolio or Pledged Treasury Securities as provided in Article III hereof in satisfaction of the obligations of the Holder of the Equity Units or Stripped Units of which such Pledged Treasury Consideration, Pledged Applicable Ownership Interest in the Treasury Portfolio or Pledged Treasury Securities, as applicable, are a part under the related Forward Purchase Contracts, the inability to make such payments shall constitute an event of default under the Forward Purchase Contracts and the Collateral Agent shall have and may exercise, with reference to such Pledged Treasury Consideration, Pledged Applicable Ownership Interest in the Treasury Portfolio or Pledged Treasury Securities, as applicable, and such obligations of such Holder, any and all of the rights and remedies available to a secured party under the Code and the TRADES Regulations after default by a debtor, and as otherwise granted herein or under any other law. (c) Without limiting any rights or powers otherwise granted by this Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably authorized to receive and collect all payments of (i) the principal amount of, or interest on, the Pledged Notes, or (ii) the principal amount of, or interest (if any) on, the Pledged Treasury Consideration, Pledged Applicable Ownership Interest in the Treasury Portfolio or Pledged Treasury Securities, subject, in each case, to the provisions of Article III, and as otherwise granted herein. (d) The Forward Purchase Contract Agent, individually and as attorney-in-fact for each Holder of Equity Units and Stripped Units, agrees that, from time to time, upon the written request of the Company or the Collateral Agent (acting upon the written request of the Company), the Forward Purchase Contract Agent or such Holder shall execute and deliver such further documents and do such other acts and things as the Company or the Collateral Agent (acting upon the written request of the Company) may reasonably request in order to maintain the Pledge, and the perfection and priority thereof, and to confirm the rights of the Collateral Agent hereunder. The Forward Purchase Contract Agent shall have no liability to any Holder for executing any documents or taking any such acts requested by the Company or the Collateral Agent (acting upon the written request of the Company) hereunder, except for liability for its own negligent act, its own negligent failure to act, its bad faith or its own willful misconduct. SECTION 6.2 Substitutions. Whenever a Holder has the right to substitute Treasury Securities or Notes for Collateral held by the Collateral Agent, such substitution shall not constitute a novation of the security interest created hereby. 16 SECTION 6.3 Tax Event Redemption. Upon the occurrence of a Tax Event Redemption prior to the earlier of a successful remarketing of the Pledged Notes or the Stock Purchase Date, the aggregate Redemption Price payable on the Tax Event Redemption Date with respect to such Pledged Notes shall be delivered to the Collateral Agent by the Trustee at or prior to 12:00 p.m., New York City time, by wire transfer in immediately available funds at such place and at such account as may be designated by the Collateral Agent in exchange for the Pledged Notes. In the event the Collateral Agent receives such Redemption Price, the Collateral Agent will, at the written direction of the Company, apply an amount, out of such Redemption Price, equal to the aggregate Tax Event Redemption Principal Amount with respect to the Pledged Notes to purchase from the Quotation Agent the Treasury Portfolio and promptly remit the remaining portion of such Redemption Price to the Forward Purchase Contract Agent for payment to the Holders of Equity Units. The Collateral Agent shall Transfer the Treasury Portfolio to the Collateral Account to secure the obligation of all Holders of Equity Units to purchase Common Stock of the Company under the Forward Purchase Contracts constituting a part of such Equity Units, in substitution for the Pledged Notes. Thereafter the Collateral Agent shall have such security interests, rights and obligations with respect to the Treasury Portfolio as it had in respect of the Pledged Notes as provided in Articles II, III, IV, V and VI, and any reference herein to the Notes shall be deemed to be a reference to such Treasury Portfolio, and any reference herein to interest on the Notes shall be deemed to be a reference to distributions on such Treasury Portfolio. ARTICLE VII REPRESENTATIONS AND WARRANTIES; COVENANTS SECTION 7.1 Representations and Warranties. The Holders from time to time, acting through the Forward Purchase Contract Agent as their attorney-in-fact (it being understood that the Forward Purchase Contract Agent shall not be liable for any representation or warranty made by or on behalf of a Holder), hereby represent and warrant to the Collateral Agent, which representations and warranties shall be deemed repeated on each day a Holder Transfers Collateral that: (a) such Holder has the power to grant a security interest in and lien on the Collateral; (b) such Holder is the sole beneficial owner of the Collateral and, in the case of Collateral delivered in physical form, is the sole holder of such Collateral and is the sole beneficial owner of, or has the right to Transfer, the Collateral it Transfers to the Collateral Agent, free and clear of any security interest, lien, encumbrance, call, liability to pay money or other restriction other than the security interest and lien granted under Section 2.1 hereof; 17 (c) upon the Transfer of the Collateral to the Collateral Account, the Collateral Agent, for the benefit of the Company, will have a valid and perfected first priority security interest therein (assuming that any central clearing operation or any Intermediary or other entity not within the control of the Holder involved in the Transfer of the Collateral, including the Collateral Agent, gives the notices and takes the action required of it hereunder and under applicable law for perfection of that interest and assuming the establishment and exercise of control pursuant to Section 2.2 hereof); and (d) the execution and performance by the Holder of its obligations under this Agreement will not result in the creation of any security interest, lien or other encumbrance on the Collateral other than the security interest and lien granted under Section 2.1 hereof or violate any provision of any existing law or regulation applicable to it or of any mortgage, charge, pledge, indenture, contract or undertaking to which it is a party or which is binding on it or any of its assets. SECTION 7.2 Covenants. The Holders from time to time, acting through the Forward Purchase Contract Agent as their attorney-in-fact (it being understood that the Forward Purchase Contract Agent shall not be liable for any covenant made by or on behalf of a Holder), hereby covenant to the Collateral Agent that for so long as the Collateral remains subject to the Pledge: (a) neither the Forward Purchase Contract Agent nor such Holders will create or purport to create or allow to subsist any mortgage, charge, lien, pledge or any other security interest whatsoever over the Collateral or any part of it other than pursuant to this Agreement; and (b) neither the Forward Purchase Contract Agent nor such Holders will sell or otherwise dispose (or attempt to dispose) of the Collateral or any part of it except for the beneficial interest therein, subject to the pledge hereunder, transferred in connection with the sale or other disposition of the Equity Units and Stripped Units. ARTICLE VIII THE COLLATERAL AGENT SECTION 8.1 Appointment, Powers and Immunities. (a) The Collateral Agent shall act as agent for the Company hereunder with such powers as are specifically vested in the Collateral Agent by the terms of this Agreement, together with such other powers as are reasonably incidental thereto. Each of the Collateral Agent, the Custodial Agent and the Securities Intermediary: (i) shall have no duties or responsibilities except those expressly set forth in this Agreement and no implied covenants or obligations shall be inferred 18 from this Agreement against any of them, nor shall any of them be bound by the provisions of any agreement by any party hereto beyond the specific terms hereof; (ii) shall not be responsible for any recitals contained in this Agreement, or in any certificate or other document referred to or provided for in, or received by it under, this Agreement, the Equity Units or Stripped Units or the Forward Purchase Contract Agreement, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement (other than as against the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be), the Equity Units or Stripped Units or the Forward Purchase Contract Agreement or any other document referred to or provided for herein or therein or for any failure by the Company or any other Person (except the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be) to perform any of its obligations hereunder or thereunder or for the perfection, priority or, except as expressly required hereby, existence, validity, perfection or maintenance of any security interest created hereunder; (iii) shall not be required to initiate or conduct any litigation or collection proceedings hereunder (except in the case of the Collateral Agent, pursuant to written directions furnished under Section 8.2 hereof, subject to Section 8.6 hereof); (iv) shall not be responsible for any action taken or omitted to be taken by it hereunder or under any other document or instrument referred to or provided for herein or in connection herewith or therewith, except for its own gross negligence or willful misconduct; and (v) shall not be required to advise any party as to selling or retaining, or taking or refraining from taking any action with respect to, the Equity Units or Stripped Units or other property deposited hereunder. Subject to the foregoing, during the term of this Agreement, the Collateral Agent shall take all reasonable action in connection with the safekeeping and preservation of the Collateral hereunder. (b) No provision of this Agreement shall require the Collateral Agent, the Custodial Agent or the Securities Intermediary to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder. In no event shall the Collateral Agent, the Custodial Agent or the Securities Intermediary be liable for any amount in excess of the value of the Collateral or for any special, indirect, individual or consequential damages or lost profits or loss of business, arising in connection with this Agreement even if the Collateral Agent, the Custodial Agent or the Securities Intermediary has been advised of the likelihood of such loss or damage being incurred and regardless of the form of action. Notwithstanding the foregoing, the Collateral Agent, the Custodial Agent, the Forward Purchase Contract Agent and the Securities Intermediary, each in its individual capacity, hereby waive any right of setoff, 19 banker's lien, liens or perfection rights as securities intermediary or any counterclaim with respect to any of the Collateral. (c) The Collateral Agent, Custodial Agent and Securities Intermediary shall have no liability whatsoever for the action or inaction of any Clearing Agency or any book-entry system thereof. In no event shall any Clearing Agency or any book-entry system thereof be deemed an agent or subcustodian of the Collateral Agent, Custodial Agent and Securities Intermediary. The Collateral Agent, Custodial Agent and Securities Intermediary shall not be responsible or liable for any failure or delay in the performance of its obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of God; earthquakes; fires; floods; war (whether declared or undeclared); terrorism; civil or military disturbances; sabotage; epidemics; riots; interruptions, loss or malfunctions of utilities, computer (hardware or software) or communications service; accidents; labor disputes; acts of civil or military authority; governmental actions; or inability to obtain labor, material, equipment or transportation. SECTION 8.2 Instructions of the Company. The Company shall have the right, by one or more instruments in writing executed and delivered to the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be, to direct the time, method and place of conducting any proceeding for the realization of any right or remedy available to the Collateral Agent, or of exercising any power conferred on the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be, or to direct the taking or refraining from taking of any action authorized by this Agreement; provided, however, that (i) such direction shall not conflict with the provisions of any law or of this Agreement and (ii) the Collateral Agent, the Custodial Agent and the Securities Intermediary shall each receive indemnity reasonably satisfactory to it as provided herein. Nothing in this Section 8.2 shall impair the right of the Collateral Agent in its discretion to take any action or omit to take any action which it deems proper and which is not inconsistent with such direction. SECTION 8.3 Reliance. Each of the Collateral Agent, the Custodial Agent and the Securities Intermediary shall be entitled conclusively to rely upon any certification, order, judgment, opinion, notice or other communication (including, without limitation, any thereof by telephone or facsimile) reasonably believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons (without being required to determine the correctness of any fact stated therein), and upon advice and statements of legal counsel and other experts selected by the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be. As to any matters not expressly provided for by this Agreement, the Collateral Agent, the Custodial Agent and the Securities Intermediary shall in all cases be fully protected in acting, or in refraining from acting, 20 hereunder in accordance with instructions given by the Company in accordance with this Agreement. SECTION 8.4 Rights in Other Capacities. The Collateral Agent, the Custodial Agent and the Securities Intermediary and their affiliates may (without having to account therefor to the Company) accept deposits from, lend money to, make investments in and generally engage in any kind of banking, trust or other business with the Forward Purchase Contract Agent, any Holder of Equity Units or Stripped Units and any holder of Separate Notes (and any of their respective subsidiaries or affiliates) as if it were not acting as the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be, and the Collateral Agent, the Custodial Agent and the Securities Intermediary and their affiliates may accept fees and other consideration from the Forward Purchase Contract Agent, any Holder of Equity Units or Stripped Units or any holder of Separate Notes without having to account for the same to the Company; provided that each of the Collateral Agent, the Custodial Agent and the Securities Intermediary covenants and agrees with the Company that, except as provided in this Agreement, it shall not accept, receive or permit there to be created in favor of itself (and waives any right of set-off or banker's lien with respect to) and shall take no affirmative action to permit there to be created in favor of any other Person, any security interest, lien or other encumbrance of any kind in or upon the Collateral and the Collateral shall not be commingled with any other assets of any such Person. SECTION 8.5 Non-Reliance on Collateral Agent. None of the Collateral Agent, the Custodial Agent or the Securities Intermediary shall be required to keep itself informed as to the performance or observance by the Forward Purchase Contract Agent or any Holder of Equity Units or Stripped Units of this Agreement, the Forward Purchase Contract Agreement, the Equity Units or Stripped Units or any other document referred to or provided for herein or therein or to inspect the properties or books of the Forward Purchase Contract Agent or any Holder of Equity Units or Stripped Units. The Collateral Agent, the Custodial Agent and the Securities Intermediary shall not have any duty or responsibility to provide the Company or the Remarketing Agent with any credit or other information concerning the affairs, financial condition or business of the Forward Purchase Contract Agent, any Holder of Equity Units or Stripped Units or any holder of Separate Notes (or any of their respective subsidiaries or affiliates) that may come into the possession of the Collateral Agent, the Custodial Agent or the Securities Intermediary or any of their respective affiliates. SECTION 8.6 Compensation and Indemnity. The Company agrees: (a) to pay each of the Collateral Agent, the Custodial Agent and the Securities Intermediary from time to time such compensation as shall be agreed in writing between the Company and the Collateral Agent, the Custodial Agent or the Securities 21 Intermediary, as the case may be, for all services rendered by each of them hereunder, and (b) to indemnify the Collateral Agent, the Custodial Agent, the Securities Intermediary and their officers, directors and agents for, and to hold each of them harmless from and against, any loss, liability or reasonable out-of-pocket expense incurred without gross negligence or willful misconduct on its part, arising out of or in connection with the acceptance or administration of its powers and duties under this Agreement, including the reasonable out-of-pocket costs and expenses (including reasonable fees and expenses of counsel) of defending itself against any claim or liability in connection with the exercise or performance of such powers and duties or collecting such amounts. The Collateral Agent, the Custodial Agent and the Securities Intermediary shall each promptly notify the Company of any third-party claim which may give rise to the indemnity hereunder and give the Company the opportunity to participate in the defense of such claim with counsel reasonably satisfactory to the indemnified party, and no such claim shall be settled without the written consent of the Company, which consent shall not be unreasonably withheld. The provisions of this Section 8.6 shall survive the resignation or removal of the Collateral Agent, the Custodial Agent and the Securities Intermediary or the termination of this Agreement. SECTION 8.7 Failure to Act. In the event of any ambiguity in the provisions of this Agreement or any dispute between or conflicting claims by or among the parties hereto or any other Person with respect to any funds or property deposited hereunder, the Collateral Agent, the Custodial Agent and the Securities Intermediary shall be entitled, after prompt notice to the Company and the Forward Purchase Contract Agent, at its sole option, to refuse to comply with any and all claims, demands or instructions with respect to such property or funds so long as such dispute or conflict shall continue, and none of the Collateral Agent, the Custodial Agent or the Securities Intermediary shall be or become liable in any way to any of the parties hereto for its failure or refusal to comply with such conflicting claims, demands or instructions. The Collateral Agent, the Custodial Agent and the Securities Intermediary shall be entitled to refuse to act until either (i) such conflicting or adverse claims or demands shall have been finally determined by a court of competent jurisdiction or settled by agreement between the conflicting parties as evidenced in a writing, reasonably satisfactory to the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be, or (ii) the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be, shall have received security or an indemnity reasonably satisfactory to the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be, sufficient to save the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be, harmless from and against any and all loss, liability or reasonable out-of-pocket expense which the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be, may incur by reason of its acting without willful misconduct or gross negligence. The Collateral Agent, the Custodial Agent or the Securities Intermediary may in addition elect to commence an interpleader action or seek other judicial relief or orders as the Collateral 22 Agent, the Custodial Agent or the Securities Intermediary, as the case may be, may deem necessary. Notwithstanding anything contained herein to the contrary, none of the Collateral Agent, the Custodial Agent or the Securities Intermediary shall be required to take any action that is in its opinion contrary to law or to the terms of this Agreement, or which would in its opinion subject it or any of its officers, employees or directors to liability. SECTION 8.8 Resignation. Subject to the appointment and acceptance of a successor Collateral Agent, the Custodial Agent or Securities Intermediary, as provided below, (a) the Collateral Agent, Custodial Agent and the Securities Intermediary may resign at any time by giving notice thereof to the Company and the Forward Purchase Contract Agent as attorney-in-fact for the Holders of Equity Units and Stripped Units, (b) the Collateral Agent, the Custodial Agent and the Securities Intermediary may be removed at any time by the Company and (c) if the Collateral Agent, the Custodial Agent or the Securities Intermediary fails to perform any of its material obligations hereunder in any material respect for a period of not less than 20 days after receiving written notice of such failure by the Forward Purchase Contract Agent and such failure shall be continuing, the Collateral Agent, the Custodial Agent or the Securities Intermediary may be removed by the Forward Purchase Contract Agent. The Forward Purchase Contract Agent shall promptly notify the Company of any removal of the Collateral Agent, the Custodial Agent or the Securities Intermediary pursuant to clause (c) of the immediately preceding sentence. The Company shall promptly notify the Forward Purchase Contract Agent of any removal of the Collateral Agent, the Custodial Agent or the Securities Intermediary pursuant to clause (b) of the second preceding sentence. Upon notice of any such resignation or removal, the Company shall have the right to appoint a successor Collateral Agent, the Custodial Agent or Securities Intermediary, as the case may be. If no successor Collateral Agent, Custodial Agent or Securities Intermediary, as the case may be, shall have been so appointed and shall have accepted such appointment within 30 days after the retiring Collateral Agent's, the Custodial Agent's or Securities Intermediary's giving of notice of resignation or such removal, then the retiring Collateral Agent, the Custodial Agent or Securities Intermediary, as the case may be, may at the Company's expense petition any court of competent jurisdiction for the appointment of a successor Collateral Agent, the Custodial Agent or Securities Intermediary, as the case may be. Each of the Collateral Agent, the Custodial Agent and the Securities Intermediary shall be a bank which has an office in New York, New York with a combined capital and surplus of at least $500,000,000 or any affiliate of a bank holding company having such capital and surplus. Upon the acceptance of any appointment as Collateral Agent, Custodial Agent or Securities Intermediary, as the case may be, hereunder by a successor Collateral Agent, Custodial Agent or Securities Intermediary, as the case may be, such successor shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Collateral Agent, Custodial Agent or Securities Intermediary, as the case may be, and the retiring Collateral Agent, Custodial Agent or Securities Intermediary, as the case may be, shall take all appropriate action to transfer any money and property held 23 by it hereunder (including the Collateral) to such successor after the payment of any outstanding fees, expenses and indemnities due and owing to such retiring party. The retiring Collateral Agent, Custodial Agent or Securities Intermediary shall, upon such succession, be discharged from its duties and obligations as Collateral Agent, Custodial Agent or Securities Intermediary hereunder. After any retiring Collateral Agent's, Custodial Agent's or Securities Intermediary's resignation hereunder as Collateral Agent, Custodial Agent or Securities Intermediary, the provisions of this Section 8.8, and Section 8.6 hereof, shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Collateral Agent, Custodial Agent or Securities Intermediary. Any resignation or removal of the Collateral Agent hereunder shall be deemed for all purposes of this Agreement as the simultaneous resignation or removal of the Custodial Agent and the Securities Intermediary hereunder. Any corporation into which the Collateral Agent, the Custodial Agent or the Securities Intermediary, in its individual capacity, may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Collateral Agent in its individual capacity shall be a party, or any corporation to which substantially all of the corporate trust business of the Collateral Agent in its individual capacity may be transferred, shall be the Collateral Agent, the Custodial Agent, the Securities Intermediary, as the case may be respectively, under this Agreement without further act. SECTION 8.9 Right to Appoint Agent or Advisor. The Collateral Agent shall have the right to appoint or consult with agents or advisors in connection with any of its duties hereunder, and the Collateral Agent shall not be liable for any action taken or omitted by, or in reliance upon the advice of, such agents or advisors selected in good faith. The appointment of agents (other than legal counsel) pursuant to this Section 8.9 shall be subject to prior consent of the Company, which consent shall not be unreasonably withheld. SECTION 8.10 Survival. The provisions of this Article VIII shall survive termination of this Agreement and the resignation or removal of the Collateral Agent, the Custodial Agent or the Securities Intermediary. SECTION 8.11 Exculpation. Anything in this Agreement to the contrary notwithstanding, in no event shall any of the Collateral Agent, the Custodial Agent or the Securities Intermediary or their officers, employees or agents be liable under this Agreement to any third party for indirect, special, punitive or consequential loss or damage of any kind whatsoever, including lost profits, whether or not the likelihood of such loss or damage was known to the Collateral Agent, the Custodial Agent or the Securities Intermediary, or any of them, and regardless of the form of action. 24 ARTICLE IX AMENDMENT SECTION 9.1 Amendment Without Consent of Holders. Without the consent of any Holders or the holders of any Separate Notes, the Company, when authorized by a Board Resolution, the Collateral Agent, the Custodial Agent, the Securities Intermediary and the Forward Purchase Contract Agent, at any time and from time to time, may amend this Agreement, in form satisfactory to the Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary and the Forward Purchase Contract Agent, for any of the following purposes: (i) to evidence the succession of another Person to the Company, and the assumption by any such successor of the covenants of the Company; or (ii) to add to the covenants of the Company for the benefit of the Holders, or to surrender any right or power herein conferred upon the Company so long as such covenants or such surrender does not adversely affect the validity, perfection or priority of the security interests granted or created hereunder; or (iii) to evidence and provide for the acceptance of appointment hereunder by a successor Collateral Agent, Custodial Agent, Securities Intermediary or Forward Purchase Contract Agent; or (iv) to cure any ambiguity, to correct or supplement any provisions herein which may be inconsistent with any other provisions herein, or to make any other provisions with respect to such matters or questions arising under this Agreement, provided such action shall not adversely affect the interests of the Holders or (v) to permit the substitution by Holders of designated Company debt instruments for the Pledged Notes as Collateral under this Agreement. SECTION 9.2 Amendment with Consent of Holders. With the consent of the Holders of not less than a majority of the Forward Purchase Contracts at the time outstanding voting together as one class, by Act of said Holders delivered to the Company, the Forward Purchase Contract Agent or the Collateral Agent, as the case may be, the Company, when duly authorized by a Board Resolution, the Forward Purchase Contract Agent, the Collateral Agent, the Custodial Agent and the Securities Intermediary may amend this Agreement for the purpose of modifying in any manner the provisions of this Agreement or the rights of the Holders in respect of the Equity Units or Stripped Units; provided, however, that no amendment agreement shall, without the consent of the Holder of each Outstanding Unit affected thereby, 25 (i) change the amount or type of Collateral underlying a Unit (except as provided in Section 9.1(v)) for the rights of holders of Equity Units to substitute the Treasury Securities for the Pledged Notes or the rights of Holders of Stripped Units to substitute Notes for the Pledged Treasury Securities), unless not adverse to the Holders, impair the right of the Holder of any Equity Units or Stripped Units to receive distributions on the underlying Collateral or otherwise adversely affect the Holder's rights in or to such Collateral; or (ii) otherwise effect any action that would require the consent of the Holder of each Outstanding Units affected thereby pursuant to the Forward Purchase Contract Agreement if such action were effected by an agreement supplemental thereto; or (iii) reduce the percentage of Forward Purchase Contracts the consent of whose Holders is required for any such amendment. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed amendment, but it shall be sufficient if such Act shall approve the substance thereof. SECTION 9.3 Execution of Amendments. In executing any amendment permitted by this Section, the Collateral Agent, the Custodial Agent, the Securities Intermediary and the Forward Purchase Contract Agent shall receive and (subject to Section 8.1 hereof, with respect to the Collateral Agent, and Section 7.1 of the Forward Purchase Contract Agreement, with respect to the Forward Purchase Contract Agent) shall be fully protected in relying upon, an officer's certificate and an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement and that all conditions precedent, if any, to the execution and delivery of such amendment have been satisfied and, in the case of an amendment pursuant to Section 9.1, that such amendment does not adversely affect the validity, perfection or priority of the security interests granted or created hereunder. SECTION 9.4 Effect of Amendments. Upon the execution of any amendment under this Article IX, this Agreement shall be modified in accordance therewith, and such amendment shall form a part of this Agreement for all purposes; and every Holder of Certificates theretofore or thereafter authenticated, executed on behalf of the Holders and delivered under the Forward Purchase Contract Agreement shall be bound thereby. SECTION 9.5 Reference to Amendments. Certificates authenticated, executed on behalf of the Holders and delivered after the execution of any amendment pursuant to this Section may, and shall if required by the Collateral Agent or the Forward Purchase Contract Agent, bear a notation in form approved by the Forward Purchase Contract Agent and the Collateral Agent as to any 26 matter provided for in such amendment. If the Company shall so determine, new Certificates so modified as to conform, in the opinion of the Collateral Agent, the Forward Purchase Contract Agent and the Company, to any such amendment may be prepared and executed by the Company and authenticated, executed on behalf of the Holders and delivered by the Forward Purchase Contract Agent in accordance with the Forward Purchase Contract Agreement in exchange for outstanding Certificates. ARTICLE X MISCELLANEOUS SECTION 10.1 No Waiver. No failure on the part of any party hereto or any of its agents to exercise, and no course of dealing with respect to, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by any party hereto or any of its agents of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies herein are cumulative and are not exclusive of any remedies provided by law. SECTION 10.2 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Without limiting the foregoing, the above choice of law is expressly agreed to by the Securities Intermediary, the Collateral Agent, the Custodial Agent and the Holders from time to time acting through the Forward Purchase Contract Agent, as their attorney-in-fact, in connection with the establishment and maintenance of the Collateral Account, which law, for purposes of the Code, shall be deemed to be the law governing all Security Entitlements related thereto. In addition, such parties agree that, for purposes of the Code, New York shall be the Securities Intermediary's jurisdiction. The Company, the Collateral Agent and the Holders from time to time of the Equity Units and Stripped Units, acting through the Forward Purchase Contract Agent as their attorney-in-fact, hereby submit to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York state court sitting in New York City for the purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. The Company, the Collateral Agent and the Holders from time to time, acting through the Forward Purchase Contract Agent as their attorney-in-fact, irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. SECTION 10.3 Notices. Unless otherwise stated herein, all notices, requests, consents and other communications provided for herein (including, without limitation, any modifications of, 27 or waivers or consents under, this Agreement) shall be given or made in writing (including, without limitation, by telecopy) delivered to the intended recipient at the "Address for Notices" specified below its name on the signature pages hereof or, as to any party, at such other address as shall be designated by such party in a notice to the other parties. Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given when personally delivered or, in the case of a mailed notice or notice transmitted by telecopier, upon receipt, in each case given or addressed as aforesaid. SECTION 10.4 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the respective successors and assigns of the Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary and the Forward Purchase Contract Agent, and the Holders from time to time of the Equity Units and Stripped Units, by their acceptance of the same, shall be deemed to have agreed to be bound by the provisions hereof and to have ratified the agreements of, and the grant of the Pledge hereunder by, the Forward Purchase Contract Agent. SECTION 10.5 Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart. SECTION 10.6 Severability. If any provision hereof is invalid and unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (i) the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intentions of the parties hereto as nearly as may be possible and (ii) the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction. SECTION 10.7 Expenses, Etc. The Company agrees to reimburse the Collateral Agent, the Securities Intermediary and the Custodial Agent for: (a) all reasonable out-of-pocket costs and all reasonable expenses of the Collateral Agent, the Custodial Agent and the Securities Intermediary (including, without limitation, the reasonable fees and expenses of counsel to the Collateral Agent, the Custodial Agent and the Securities Intermediary), in connection with (i) the negotiation, preparation, execution and delivery or performance of this Agreement and (ii) any modification, supplement or waiver of any of the terms of this Agreement; 28 (b) all reasonable costs and expenses of the Collateral Agent (including, without limitation, reasonable fees and expenses of counsel) in connection with (i) any enforcement or proceedings resulting or incurred in connection with causing any Holder of Equity Units or Stripped Units to satisfy its obligations under the Forward Purchase Contracts forming a part of the Equity Units and Stripped Units and (ii) the enforcement of this Section 10.7; and (c) all transfer, stamp, documentary or other similar taxes, assessments or charges levied by any governmental or revenue authority in respect of this Agreement or any other document referred to herein and all costs, expenses, taxes, assessments and other charges incurred in connection with any filing, registration, recording or perfection of any security interest contemplated hereby. SECTION 10.8 Security Interest Absolute. All rights of the Collateral Agent and security interests hereunder, and all obligations of the Holders from time to time hereunder, shall be absolute and unconditional irrespective of: (a) any lack of validity or enforceability of any provision of the Forward Purchase Contracts or the Equity Units or Stripped Units or any other agreement or instrument relating thereto; (b) any change in the time, manner or place of payment of, or any other term of, or any increase in the amount of, all or any of the obligations of Holders of Equity Units or Stripped Units under the related Forward Purchase Contracts, or any other amendment or waiver of any term of, or any consent to any departure from any requirement of, the Forward Purchase Contract Agreement or any Forward Purchase Contract or any other agreement or instrument relating thereto; or (c) any other circumstance which might otherwise constitute a defense available to, or discharge of, a borrower, a guarantor or a pledgor. SECTION 10.9 Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 29 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. AMERICAN ELECTRIC POWER COMPANY, INC. By:________________________________ Name: Title: Address for Notices: American Electric Power Company, Inc. 1 Riverside Plaza Columbus, Ohio 43215 Attention: General Counsel Telecopy: (614) 223-1687 30 THE BANK OF NEW YORK, as Forward Purchase Contract Agent and as attorney-in-fact of the Holders from time to time of the Equity Units and Stripped Units By:___________________________ Name: Title: Address for Notices: 101 Barclay Street New York, New York 10286 Attention: Corporate Trust Department Telecopy: (212) 328-8243 THE BANK OF NEW YORK, as Collateral Agent, Custodial Agent and Securities Intermediary By:___________________________ Name: Title: Address for Notices: 101 Barclay Street New York, New York 10286 Attention: Corporate Trust Department Telecopy: (212) 328-8243 31 EXHIBIT A INSTRUCTION FROM FORWARD PURCHASE CONTRACT AGENT TO COLLATERAL AGENT The Bank of New York, as Collateral Agent 101 Barclay Street New York, New York 10286 Attention: Corporate Trust Department Re: Equity Units of American Electric Power Company, Inc. (the "Company") We hereby notify you in accordance with Section [4.1] [4.2] of the Pledge Agreement, dated as of June 11, 2002 (the "Pledge Agreement"), among the Company, you, as Collateral Agent, Custodial Agent and Securities Intermediary and us, as Forward Purchase Contract Agent and as attorney-in-fact for the holders of [Equity Units] [Stripped Units] from time to time, that the holder of Equity Units or Stripped Units listed below (the "Holder") has elected to substitute $_____ aggregate principal amount of Treasury Securities (CUSIP No. 912803AG8) in exchange for the related [Pledged Notes] [Pledged Treasury Securities] held by you in accordance with the Pledge Agreement and has delivered to us a notice stating that the Holder has Transferred [Treasury Securities] [Notes] to you, as Collateral Agent. We hereby instruct you, upon receipt of such [Pledged Treasury Securities] [Pledged Notes], and upon the payment by such Holder of any applicable fees, to release the [Notes] [Treasury Securities] related to such [Equity Units] [Stripped Units] to us in accordance with the Holder's instructions. Capitalized terms used herein but not defined shall have the meaning set forth in the Pledge Agreement. Date: _________________________ THE BANK OF NEW YORK, as Forward Purchase Contract Agent By:________________________________ Name: Title: A-1 Please print name, Social Security or other Taxpayer Identification Number, if any, and address of registered Holder electing to substitute [Treasury Securities] [Notes] for the [Pledged Notes] [Pledged Treasury Securities]: Name: Social Security or other Taxpayer Identification Number, if any: Address: A-2 EXHIBIT B INSTRUCTION TO FORWARD PURCHASE CONTRACT AGENT The Bank of New York, As Forward Purchase Contract Agent 101 Barclay Street New York, New York 10286 Attention: Corporate Trust Department Telecopy: (212) 328-8243 Re: Equity Units of American Electric Power Company, Inc. (the "Company") The undersigned Holder hereby notifies you that it has delivered to The Bank of New York, as Collateral Agent, Custodial Agent and Securities Intermediary [$_______ aggregate principal amount of Notes] [$_______ aggregate principal amount of Treasury Securities (CUSIP No. 912803AG8)] in exchange for the related [Pledged Notes] [Pledged Treasury Securities] held by the Collateral Agent, in accordance with Section [4.1] [4.2] of the Pledge Agreement, dated June 11, 2002 (the "Pledge Agreement"), among you, the Company and the Collateral Agent. The undersigned Holder has paid the Collateral Agent all applicable fees relating to such exchange. The undersigned Holder hereby instructs you to instruct the Collateral Agent to release to you on behalf of the undersigned Holder the [Pledged Notes] [Pledged Treasury Securities] related to such [Equity Units] [Stripped Units]. Capitalized terms used herein but not defined shall have the meaning set forth in the Pledge Agreement. Date: ___________________ Signature:___________________________ Signature Guarantee: ___________________________ Name: Social Security or other Taxpayer Identification Number, if any: Address: B-1 EXHIBIT C INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING The Bank of New York, as Custodial Agent 101 Barclay Street New York, New York 10286 Attention: Corporate Trust Department Re: Notes of American Electric Power Company, Inc. (the "Company") The undersigned hereby notifies you in accordance with Section 4.5(d) of the Pledge Agreement, dated as of June 11, 2002 (the "Pledge Agreement"), among the Company, yourselves, as Collateral Agent, Securities Intermediary and Custodial Agent, and The Bank of New York, as Forward Purchase Contract Agent and as attorney-in-fact for the Holders of Equity Units and Stripped Units from time to time, that the undersigned elects to deliver $________ aggregate principal amount of Notes for delivery to the Remarketing Agent [on the fourth Business Day immediately preceding the Remarketing Date], [on the first day of the next scheduled Remarketing Period] for remarketing pursuant to Section 4.5(d) of the Pledge Agreement. The undersigned will, upon request of the Remarketing Agent, execute and deliver any additional documents deemed by the Remarketing Agent or by the Company to be necessary or desirable to complete the sale, assignment and transfer of the Notes tendered hereby. The undersigned hereby instructs you, upon receipt of the proceeds of such remarketing from the Remarketing Agent, net of amounts payable to the Remarketing Agent in accordance with the Pledge Agreement, to deliver such proceeds to the undersigned in accordance with the instructions indicated herein under "A. Payment Instructions." The undersigned hereby instructs you, in the event of a Failed Remarketing, upon receipt of the Notes tendered herewith from the Remarketing Agent, to deliver the Notes to the person(s) at the address indicated herein under "B. Delivery Instructions." Notwithstanding the foregoing, in the event that such Failed Remarketing constitutes the Last Failed Remarketing, you shall retain all such Notes. With this notice, the undersigned hereby (i) represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Notes tendered hereby and that the undersigned is the record owner of any Notes tendered herewith in physical form or a participant in The Depository Trust Company ("DTC") and the beneficial owner of any Notes tendered herewith by book-entry transfer to your account at DTC and (ii) agrees to be bound by the terms and conditions of Section 4.5(d) of the Pledge Agreement. Capitalized terms used herein but not defined shall have the meaning set forth in the Pledge Agreement. C-1 Date: ___________________ Signature:___________________________ Signature Guarantee: _________________________ Name: Social Security or other Taxpayer Identification Number, if any: Address: C-2 A. PAYMENT INSTRUCTIONS Proceeds of the remarketing should be paid by check in the name of the person(s) set forth below and mailed to the address set forth below. Name(s): ________________________________ (Please Print) Address: ________________________________ (Zip Code) (Please Print) (Taxpayer Identification or Social Security Number): B. DELIVERY INSTRUCTIONS In the event of a Failed Remarketing, Notes which are in physical form should be mailed to the person(s) set forth below at the address set forth below. Name(s): ________________________________ (Please Print) Address: ________________________________ (Zip Code) (Please Print) (Taxpayer Identification or Social Security Number): In the event of a Failed Remarketing, Notes which are in book-entry form should be credited to the account at The Depository Trust Company set forth below. Name of Account Party: DTC Account Number: C-3 EXHIBIT D INSTRUCTION TO CUSTODIAL AGENT REGARDING WITHDRAWAL FROM REMARKETING The Bank of New York, as Collateral Agent 101 Barclay Street New York, New York 10286 Attention: Corporate Trust Department Re: Notes of American Electric Power Company, Inc. (the "Company") The undersigned hereby notifies you in accordance with Section 4.5(d) of the Pledge Agreement, dated as of June 11, 2002 (the "Pledge Agreement"), among the Company, yourselves, as Collateral Agent, Securities Intermediary and Custodial Agent and The Bank of New York, as Forward Purchase Contract Agent and as attorney-in-fact for the Holders of Equity Units and Stripped Units from time to time, that the undersigned elects to withdraw the $_____ aggregate principal amount of Notes delivered to the Custodial Agent on ___________, ____ for remarketing pursuant to Section 4.5(d) of the Pledge Agreement. The undersigned hereby instructs you to return such Notes to the undersigned in accordance with the undersigned's instructions. With this notice, the undersigned hereby agrees to be bound by the terms and conditions of Section 4.5(d) of the Pledge Agreement. Capitalized terms used herein but not defined shall have the meaning set forth in the Pledge Agreement. Name(s): ________________________________ (Please Print) Address: ________________________________ (Zip Code) (Please Print) (Taxpayer Identification or Social Security Number): A. DELIVERY INSTRUCTIONS In the event of a Failed Remarketing, Notes which are in physical form should be mailed to the person(s) set forth below at the address set forth below. Name(s): ________________________________ D-1 (Please Print) Address: ________________________________ (Zip Code) (Please Print) (Taxpayer Identification or Social Security Number): In the event of a Failed Remarketing, Notes which are in book-entry form should be credited to the account at The Depository Trust Company set forth below. Name of Account Party: DTC Account Number: D-2 EX-4.4 8 dex44.txt EXHIBIT 4.4 Exhibit 4.4 AMERICAN ELECTRIC POWER COMPANY, INC. REMARKETING AGREEMENT REMARKETING AGREEMENT, dated as of June 11, 2002 (the "Agreement") by and between American Electric Power Company, Inc., a New York corporation (the "Company"), and Salomon Smith Barney Inc. (the "Remarketing Agent"), and confirmed and accepted by The Bank of New York, not individually but solely as Forward Purchase Contract Agent (the "Forward Purchase Contract Agent") and as attorney-in-fact of the Holders of Forward Purchase Contracts (as defined in the Forward Purchase Contract Agreement (as defined herein)). WHEREAS, the Company issued $300,000,000 (or up to $345,000,000 if the Underwriters' over-allotment option was exercised in full) aggregate stated amount of its Equity Units (the "Equity Units") under the Forward Purchase Contract Agreement, dated as of June 11, 2002, by and between the Forward Purchase Contract Agent and the Company (the "Forward Purchase Contract Agreement"); and WHEREAS, the notes forming a part of the Equity Units (the "Notes") have been pledged pursuant to the Pledge Agreement (the "Pledge Agreement"), dated as of June 11, 2002, by and among the Company, The Bank of New York, as collateral agent (the "Collateral Agent"), custodial agent and securities intermediary and the Forward Purchase Contract Agent, to secure the obligations of Holders of Equity Units under the related Forward Purchase Contracts on the Stock Purchase Date; and WHEREAS, the Remarketing Agent will attempt on the Remarketing Date to remarket all of (i) the Notes of Holders of Equity Units, other than the Notes of Holders of Equity Units who elect not to participate in the remarketing, and (ii) the Separate Notes of Holders who elect to participate in the remarketing, pursuant respectively to the procedures set forth in Section 5.6(b) of the Forward Purchase Contract Agreement, Section 4.5(d) of the Pledge Agreement and Section 1.6 of the Supplemental Indenture (as defined below) (each of which Sections is incorporated herein by reference); and WHEREAS, in the event the remarketing on the Remarketing Date is unsuccessful, the Remarketing Agent will remarket the Notes to be included in the remarketing on each of the two Business Days immediately following the Remarketing Date, and, if necessary, will attempt to remarket such Notes on each of the three Business Days immediately preceding June 16, 2005 and, if necessary, will further attempt to remarket such Notes on each of the three Business Days immediately preceding July 16, 2005 and, if necessary, will further attempt to remarket the Notes on each of the three Business Days immediately preceding August 12, 2005; and WHEREAS, in the event of a successful remarketing on the Remarketing Date or any Subsequent Remarketing Date, as the case may be, the applicable interest rate on the Notes included in such successful remarketing will be reset on the settlement date of such Remarketing Date or Subsequent Remarketing Date to the Reset Rate to be determined by the Remarketing Agent such that the then current aggregate market value of the Notes will equal approximately, but not less than, 100.25% of the Remarketing Value (as described in the Third Supplemental Indenture, dated as of June 11, 2002, between the Company and The Bank of New York, as trustee (the "Supplemental Indenture")), as of such Remarketing Date or Subsequent Remarketing Date, provided that in the determination of such Reset Rate, the Company shall, if applicable, limit the Reset Rate to the maximum rate permitted by applicable law; and WHEREAS, the Company has requested Salomon Smith Barney Inc. to act as the Remarketing Agent, and as such to perform the services described herein; and WHEREAS, Salomon Smith Barney Inc. is willing to act as the Remarketing Agent and as such to perform such duties on the terms and conditions expressly set forth herein; NOW, THEREFORE, for and in consideration of the covenants herein made, and subject to the conditions herein set forth, the parties hereto agree as follows: Section 1. Definitions. ------------ Capitalized terms used and not defined in this Agreement, in the recitals hereto or in the paragraph preceding such recitals shall have the meanings assigned to them in the Forward Purchase Contract Agreement or, if not therein defined, the Pledge Agreement. Section 2. Appointment and Obligations of Remarketing Agent. ------------------------------------------------- (a) The Company hereby appoints Salomon Smith Barney Inc. and Salomon Smith Barney Inc. hereby accepts such appointment, (i) as the Remarketing Agent to determine, in consultation with the Company, in the manner provided for herein, in the Forward Purchase Contract Agreement and in the Notes, the Reset Rate that, in the opinion of the Remarketing Agent, will, when applied to the Notes, enable the then current aggregate market value of the Notes to have a value equal to approximately, but not less than, 100.25% of the Remarketing Value as of the Remarketing Date or as of any Subsequent Remarketing Date, as the case may be, provided that the Company, by notice to the Remarketing Agent prior to (A) the tenth Business Day preceding the Remarketing Date, with respect to any remarketing to occur on either the Remarketing Date or the two Business Days immediately following such Remarketing Date, (B) the fifth Business Day preceding June 16, 2005, with respect to any remarketing to occur on any of the three Business Days immediately preceding June 16, 2005, (C) the fifth Business Day preceding July 16, 2005 with respect to any remarketing to occur on any of the three Business Days immediately preceding July 16, 2005 or (D) the fifth Business Day preceding August 12, 2005, with respect to any remarketing to occur on any of the three Business Days immediately preceding August 12, 2005, shall, if applicable, limit the Reset Rate so that it does not exceed the maximum rate permitted by applicable law, and (ii) as the exclusive Remarketing Agent (subject to the right of such Remarketing Agent to appoint additional remarketing agents hereunder as described below) to remarket the Notes to be included in the remarketing on the Remarketing Date or during any subsequent Remarketing Period, as the case may be. The Remarketing Agent shall have the right, on 15 Business Days' notice to the Company, to appoint one or more additional remarketing agents so long as any such additional remarketing agents shall be reasonably acceptable to the Company. Upon any such appointment, the parties shall enter into an appropriate amendment to this Agreement to reflect the addition of any such additional remarketing agent. (b) Subject to the terms and conditions set forth herein and in the Forward Purchase Contract Agreement, the Remarketing Agent shall use its commercially reasonable best efforts to (i) remarket on the Remarketing Date the Notes that the Forward Purchase Contract Agent or the Custodial Agent shall have notified the Remarketing Agent are to be remarketed at a Reset Rate such that the then current aggregate market value of the Notes is equal to approximately, but not less than, 100.25% of the Remarketing Value, (ii) in the event the Remarketing Agent cannot establish such a Reset Rate on the Remarketing Date, attempt to remarket such Notes on each of the two Business Days immediately following the Remarketing Date and, if necessary, on each of the three Business Days immediately preceding June 16, 2005 and, if necessary, on each of the three Business Days immediately preceding July 16, 2005 and, if necessary, on each of the three Business Days preceding August 12, 2005, in each case at a Reset Rate such that the then current aggregate market value of the Notes is equal to approximately, but not less than, 100.25% of the Remarketing Value and (iii) in the event of a Last Failed Remarketing, promptly return the Pledged Notes, if any, included in such Last Failed Remarketing to the Collateral Agent to be held by the Collateral Agent in accordance with Section 4.5(b) of the Pledge Agreement (which Section is incorporated herein by reference) and return any Separate Notes included in the remarketing to the Custodial Agent in accordance with Section 4.5(d) of the Pledge Agreement, Section 5.6(e) of the Forward Purchase Contract Agreement and Section 1.6 of the Supplemental Indenture (which Sections are incorporated herein by reference). After deducting the fee specified in Section 3 below, the proceeds of any such successful remarketing shall be delivered to the Forward Purchase Contract Agent or the Custodial Agent, as applicable, in accordance with Section 4.5(a) of the Pledge Agreement (which Section is incorporated herein by reference) and Section 5.6(b) of the Forward Purchase Contract Agreement (which Section is incorporated herein by reference). The right of each Holder of Equity Units or Separate Notes to have Notes included in any remarketing shall be subject to the conditions that (i) the Remarketing Agent conducts a remarketing on such date pursuant to the terms of this Agreement, (ii) the Notes included in a remarketing have not been called for redemption upon the occurrence of a Tax Event, (iii) the Remarketing Agent is able to find a purchaser or purchasers for the Notes included in a remarketing at a Reset Rate such that the then current aggregate market value of the Notes is equal to approximately, but not less than, 100.25% of the Remarketing Value and (iv) such purchaser or purchasers deliver the purchase price therefor to the Remarketing Agent as and when required. (c) It is understood and agreed that the Remarketing Agent shall not have any obligation whatsoever to purchase any Notes, whether in a remarketing held on the Remarketing Date or on any Subsequent Remarketing Date or otherwise, and shall in no way be obligated to provide funds to make payment upon tender of Notes for remarketing or to otherwise expend or risk its own funds or incur or be exposed to financial liability in the performance of its duties under this Agreement. The Company shall not be obligated in any case to provide funds to make payment upon delivery of Notes for remarketing. Section 3. Fees. ----- In the event of a successful remarketing, the Remarketing Agent shall retain as a remarketing fee (the "Remarketing Fee") an amount not exceeding 25 basis points (0.25%) of the total proceeds received in connection with the remarketing in accordance with Section 5.4(d) of the Forward Purchase Contract Agreement and Section 1.6 of the Supplemental Indenture. Section 4. Replacement and Resignation of Remarketing Agent. ------------------------------------------------- (a) The Company may in its absolute discretion replace Salomon Smith Barney Inc. as the Remarketing Agent by giving notice prior to 3:00 p.m., New York City time on (i) the eleventh Business Day immediately prior to the Remarketing Date in the case of a remarketing to occur on the Remarketing Date or either of the two Business Days immediately following the Remarketing Date, (ii) the seventh Business Day immediately prior to June 16, 2005 in the case of a remarketing to occur on a Subsequent Remarketing Date immediately following a Failed Remarketing on any of the two Business Days immediately following the Remarketing Date, (iii) the seventh Business Day immediately prior to July 16, 2005 in the case of a remarketing to occur on any of the three Business Days immediately prior to July 16, 2005 or (iv) the fourteenth Business Day immediately prior to the Stock Purchase Date in the case of a remarketing to occur on any of the three Business Days immediately prior to August 12, 2005. Any such replacement shall become effective upon the Company's appointment of a successor to perform the services that would otherwise be performed hereunder by the Remarketing Agent. Upon providing such notice, the Company shall use all reasonable efforts to appoint such a successor and to enter into a remarketing agreement with such successor as soon as reasonably practicable. (b) Salomon Smith Barney Inc. may resign at any time and be discharged from its duties and obligations hereunder as the Remarketing Agent by giving notice prior to 3:00 p.m., New York City time on (i) the eleventh Business Day immediately prior to the Remarketing Date in the case of a remarketing to occur on the Remarketing Date or either of the two Business Days immediately following the Remarketing Date, (ii) the seventh Business Day immediately prior to June 16, 2005 in the case of a remarketing to occur on a Subsequent Remarketing Date immediately following a Failed Remarketing on any of the two Business Days immediately following the Remarketing Date, (iii) the seventh Business Day immediately prior to July 16, 2005 in the case of a remarketing to occur on any of the three Business Days immediately prior to July 16, 2005 or (iv) the fourteenth Business Day immediately prior to the Stock Purchase Date in the case of a remarketing to occur on any of the three Business Days immediately prior to August 12, 2005. Any such resignation shall become effective upon the Company's appointment of a successor to perform the services that would otherwise be performed hereunder by the Remarketing Agent. Upon receiving notice from the Remarketing Agent that it wishes to resign hereunder, the Company shall use all reasonable efforts to appoint such a successor and enter into a remarketing agreement with it as soon as reasonably practicable. (c) The Company shall give the Forward Purchase Contract Agent, the Collateral Agent, the Custodial Agent and the Trustee prompt written notice of any replacement of the Remarketing Agent pursuant to this section. Section 5. Dealing in the Securities. -------------------------- The Remarketing Agent, when acting hereunder or when acting in its individual or any other capacity, may, to the extent permitted by law, buy, sell, hold or deal in any of the Notes, Equity Units, Stripped Units or any other securities of the Company; provided, however, that in buying, selling, holding, or dealing in any of the Notes, Equity Units, Stripped Units or any other securities of the Company, the Remarketing Agent may not violate any of its duties under this Agreement. With respect to any Notes, Equity Units, Stripped Units or any other securities of the Company owned by it, the Remarketing Agent may exercise any vote or join in any action with like effect as if it did not act in any capacity hereunder. The Remarketing Agent, in its individual capacity, either as principal or agent, may also engage in or have an interest in any financial or other transaction with the Company as freely as if it did not act in any capacity hereunder. The Company or its affiliates may, to the extent permitted by law, purchase any Notes that are remarketed by the Remarketing Agent. Section 6. Registration Statement and Prospectus. -------------------------------------- (a) In connection with any remarketing to occur on the Remarketing Date or any Subsequent Remarketing Date, if and to the extent required, in the view of counsel (which need not be an opinion) for each of the Remarketing Agent and the Company, by applicable law, regulations or interpretations in effect at the time of the Remarketing Date or Subsequent Remarketing Date, as the case may be, the Company (i) shall use its reasonable efforts (A) to have a registration statement relating to the Notes effective under the Securities Act of 1933 and (B) to furnish a current preliminary prospectus or, if applicable, a current preliminary prospectus supplement (in such quantities as the Remarketing Agent may reasonably request), to be used by the Remarketing Agent in a remarketing hereunder, in each case by a date that is no later than (w) seven Business Days prior to the Remarketing Date in the case of a remarketing to occur on the Remarketing Date or on any of the two Business Days immediately following the Remarketing Date, and (x) ten Business Days prior to June 16, 2005 in the case of a remarketing to occur on any of the three Business Days prior to June 16, 2005, (y) ten Business Days prior to July 16, 2005 in the case of a remarketing to occur on any of the three Business Days immediately prior to July 16, 2005 or (z) ten Business Days prior to the Stock Purchase Date in the case of a remarketing to occur on any of the three Business Days prior to August 12, 2005 (or in each such case, at such earlier date as the Remarketing Agent may reasonably request), and (ii) if requested by the Remarketing Agent, shall furnish a current final prospectus or, if applicable, a final prospectus supplement, to be used by the Remarketing Agent in the remarketing hereunder, by a date that is no later than (w) five Business Days prior to the Remarketing Date in the case of a remarketing to occur on the Remarketing Date or on any of the two Business Days immediately following the Remarketing Date, and (x) eight Business Days prior to June 16, 2005 in the case of a remarketing to occur on any of the three Business Days prior to June 16, 2005, (y) eight Business Days prior to July 16, 2005 in the case of a remarketing to occur on any of the three Business Days immediately prior to July 16, 2005 or (z) eight Business Days prior to the Stock Purchase Date in the case of a remarketing to occur on any of the three Business Days prior to August 12, 2005 (or in each such case, at such earlier date as the Remarketing Agent may reasonably request). The Company shall pay all expenses relating thereto. (b) If in connection with any remarketing, it shall not be possible, in the view of counsel (which need not be an opinion) for each of the Remarketing Agent and the Company, under applicable law, regulations or interpretations in effect as of the Remarketing Date or subsequent Remarketing Period, as the case may be, to register the offer and sale by the Remarketing Agent of the Notes under the Securities Act of 1933 as otherwise contemplated by this Section 6, the Company (i) shall use its reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper and advisable to permit and effectuate the offer and sale of the Notes in connection with any remarketing hereunder without registration under the Securities Act of 1933 pursuant to an exemption therefrom, if available, including the exemption afforded by Rule 144A promulgated under the Securities Act of 1933 by the Securities and Exchange Commission, and (ii) if requested by the Remarketing Agent, shall furnish a current preliminary remarketing memorandum and a current final remarketing memorandum (in such quantities as the Remarketing Agent may reasonably request) to be used by the Remarketing Agent in any remarketing hereunder, in each case by a date that is not later than (A) seven Business Days prior to the Remarketing Date in the case of a remarketing to occur on the Remarketing Date or on any of the two Business Days immediately following the Remarketing Date, and (B) ten Business Days prior to June 16, 2005 in the case of a remarketing to occur on any of the three Business Days immediately prior to June 16, 2005 and (C) ten Business Days prior to July 16, 2005 in the case of a remarketing to occur on any of the three Business Days prior to July 16, 2005 or (D) ten Business Days prior to the Stock Purchase Date in the case of a remarketing to occur on any of the three Business Days prior to August 12, 2005 (or in either case such earlier date as the Remarketing Agent may reasonably request). The Company shall pay all expenses relating thereto. (c) The Company shall also take all reasonable actions as may (upon advice of counsel to the Company or the Remarketing Agent) be necessary or desirable under state securities or blue sky laws in connection with any remarketing. Section 7. Conditions to the Remarketing Agent's Obligations. -------------------------------------------------- (a) The obligations of the Remarketing Agent under this Agreement shall be subject to the terms and conditions hereof, including, without limitation, the following conditions: (i) the Notes to be included in any remarketing have not been called for redemption, (ii) the Remarketing Agent is able to find a purchaser or purchasers for the Notes included in any remarketing at a price equal to approximately, but not less than, 100.25% of the Remarketing Value, (iii) the Forward Purchase Contract Agent, the Collateral Agent, the Custodial Agent, the Securities Intermediary, the Company and the Trustee shall have performed their respective obligations in connection with any remarketing hereunder and pursuant to the Forward Purchase Contract Agreement, the Pledge Agreement, the Indenture and this Agreement (including, without limitation, the Forward Purchase Contract Agent's and the Custodial Agent's giving the Remarketing Agent notice of the aggregate number of Notes to be remarketed, no later than 10:00 a.m., New York City time, on the third Business Day preceding the Remarketing Date, and concurrently delivering the Notes to be remarketed to the Remarketing Agent), (iv) no Event of Default (as defined in the Indenture) shall have occurred and be continuing, (v) the performance by the Company of its covenants and other obligations included herein, (vi) the receipt of assurances, in form and substance reasonably satisfactory to the Remarketing Agent, from each pension, profit-sharing or other employee benefit plan as defined in Section 3 of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), each individual retirement account subject to Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"), and each entity whose assets include plan assets under Title I of ERISA, in each case that is participating in the remarketing, that the participation of such employee benefit plan, individual retirement account or plan asset entity in the remarketing will not constitute a prohibited transaction under ERISA or the Code or other similar laws for which an exemption is not available and (vii) the satisfaction of the other conditions set forth in this Agreement. (b) If at any time during the term of this Agreement, any Event of Default (as defined in the Indenture) or event that with the passage of time or the giving of notice or both would become an Event of Default has occurred and is continuing under the Indenture, then the obligations and duties of the Remarketing Agent under this Agreement shall be suspended until such default or event has been cured. The Company will promptly give the Remarketing Agent notice of all such defaults and events of which the Company is aware. Section 8. Termination of Remarketing Agreement. ------------------------------------- This Agreement shall terminate as to any Remarketing Agent which is replaced on the effective date of its replacement pursuant to Section 4(a) hereof or pursuant to Section 4(b) hereof. Notwithstanding the foregoing, the obligations set forth in Section 3 hereof shall survive and remain in full force and effect until all amounts payable under Section 3 shall have been paid in full; provided, however, that if any Remarketing Agent resigns, then, with respect to such Remarketing Agent, the obligations set forth in Section 3 hereof shall not survive the termination of this Agreement and no fee shall be payable to such Remarketing Agent in such capacity. In addition, each current and former Remarketing Agent shall be entitled to the rights and benefits under Sections 9, 10 and 12(b) of this Agreement notwithstanding the replacement or resignation of such Remarketing Agent or termination of this Agreement. Section 9. Remarketing Agent's Performance; Duty of Care. ---------------------------------------------- The duties and obligations of the Remarketing Agent shall be determined solely by the express provisions hereof. No implied covenants or obligations of or against the Remarketing Agent shall be read into this Agreement. In the absence of a final judicial determination of willful misconduct, bad faith or gross negligence on the part of the Remarketing Agent, the Remarketing Agent may conclusively rely upon any document furnished to it which purports to conform to the requirements hereunder as to the truth of the statements expressed therein. The Remarketing Agent shall be protected in acting upon any document or communication reasonably believed by it to be signed, presented or made by the proper party or parties. The Remarketing Agent shall not have any obligation to determine whether there is any limitation under applicable law on the Reset Rate on the Notes or, if there is any such limitation, the maximum permissible Reset Rate on the Notes, and it shall rely solely upon timely written notice from the Company pursuant to Section 2(a) hereof as to whether or not there is any such limitation and, if so, the maximum permissible Reset Rate. The Remarketing Agent shall not incur any liability under this Agreement to any beneficial owner or holder of Notes, or other securities, either in its individual capacity or as Remarketing Agent, as the case may be, for any action or failure to act in connection with the remarketing of the Notes or otherwise in connection with the transactions contemplated by this Agreement, except to the extent that such liability has, by final judicial determination, resulted from the willful misconduct, bad faith or gross negligence of the Remarketing Agent or from its failure to fulfill its express obligations hereunder. The provisions of this Section 9 shall survive any termination of this Agreement and shall also continue to apply to every Remarketing Agent notwithstanding its resignation or removal. The Remarketing Agent will act as the agent of the Holders. Section 10. Indemnification. ---------------- The Company agrees to indemnify the Remarketing Agent for, and to hold it harmless from and against, any loss, liability or reasonable out-of-pocket expense incurred without gross negligence, willful misconduct or bad faith on its part, arising out of or in connection with the acceptance or administration of its powers and duties under this Agreement, including the reasonable out-of-pocket costs and expenses (including reasonable fees and expenses of counsel) of defending itself against any claim or liability in connection with the exercise or performance of such powers and duties or collecting such amounts. The Remarketing Agent shall promptly notify the Company of any third party claim which may give rise to the indemnity hereunder and give the Company the opportunity to participate in the defense of such claim with counsel reasonably satisfactory to the indemnified party, and no such claim shall be settled without the written consent of the Company, which consent shall not be unreasonably withheld. Section 11. Governing Law. -------------- This Agreement shall be governed by and construed in accordance with the laws of the State of New York. Section 12. Term of Agreement. ------------------ (a) Unless otherwise terminated in accordance with the provisions hereof and except as otherwise provided herein, this Agreement shall remain in full force and effect from the date hereof until the third Business Day immediately following the earlier of (i) a successful remarketing, and (ii) the Stock Purchase Date. Anything herein to the contrary notwithstanding, the provisions of the second and third sentences of Section 8 hereof and the provisions of Sections 3, 9, 10 and 12(b) hereof shall survive any termination of this Agreement and remain in full force and effect; provided, however, that if any Remarketing Agent resigns, then the obligations set forth in section 3 hereof shall not survive the termination of this Agreement and no fee shall be payable to such remarketing agent in such capacity. (b) All representations and warranties included in this Agreement or contained in certificates of officers of the Company submitted pursuant hereto shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Remarketing Agent or any of its controlling persons, or by or on behalf of the Company or the Forward Purchase Contract Agent, and shall survive the termination of this Agreement. Section 13. Successors and Assigns. ----------------------- The rights and obligations of the Company and the Forward Purchase Contract Agent (both in its capacity as Forward Purchase Contract Agent and as attorney-in-fact for the Holders) hereunder may not be assigned or delegated to any other person (except pursuant to sections 7.9, 7.10 and 7.11 and Article IX of the Forward Purchase Contract Agreement) without the prior written consent of the Remarketing Agent, which consent shall not be unreasonably withheld. The rights and obligations of the Remarketing Agent hereunder may not be assigned or delegated to any other person without the prior written consent of the Company, except that the Remarketing Agent shall have the right to appoint additional remarketing agents as provided herein. This Agreement shall inure to the benefit of and be binding upon the Company, the Forward Purchase Contract Agent and the Remarketing Agent and their respective successors and permitted assigns. The terms "successors" and "assigns" shall not include any purchaser of Notes merely because of such purchase. Section 14. Headings. --------- Section headings have been inserted in this Agreement as a matter of convenience of reference only, and such section headings are not a part of this Agreement and will not be used in the interpretation of any provision of this Agreement. Section 15. Severability. ------------- If any provision of this Agreement is invalid, inoperative or unenforceable as applied in any particular case in any or all jurisdictions because it conflicts with any provisions of any constitution, statute, rule or public policy or for any other reason, then, to the extent permitted by law, such circumstances shall not have the effect of rendering the provision in question invalid, inoperative or unenforceable in any other case, circumstances or jurisdiction, or of rendering any other provision or provisions of this Agreement, as the case may be, invalid, inoperative or unenforceable to any extent whatsoever. Section 16. Counterparts. ------------- This Agreement may be executed in counterparts, each of which shall be regarded as an original and all of which shall constitute one and the same document. Section 17. Amendments. ----------- This Agreement may be amended only by an instrument in writing signed by the parties hereto. Section 18. Notices. -------- Unless otherwise specified, any notices, requests, consents or other communications given or made hereunder shall be made in writing or transmitted by any standard form of telecommunication, including telephone or telecopy, and confirmed in writing. All written notices and confirmations of notices by telecommunication shall be deemed to have been validly given or made when delivered or mailed, registered or certified mail, return receipt requested and postage prepaid. All such notices, requests, consents or other communications shall be addressed as follows: if to the Company, to American Electric Power Company, Inc., 1 Riverside Plaza, Columbus, Ohio 43215, fax number: (614) 223-1687, Attention: General Counsel; if to the Remarketing Agent, to Salomon Smith Barney Inc., 388 Greenwich Street, New York, New York 10013, fax number (212) 816-7912, Attention: General Counsel; if to the Collateral Agent, to The Bank of New York, 101 Barclay Street, New York, New York 10286, fax number (212) 328-8243, Attention: Corporate Trust Department; and if to the Forward Purchase Contract Agent, to The Bank of New York, 101 Barclay Street, New York, New York 10286, fax number: (212) 328-8243, Attention: Corporate Trust Department, or to such other address as any of the above shall specify to the others in writing. Section 19. Information. ------------ The Company agrees to furnish the Remarketing Agent with such information and documents as the Remarketing Agent may reasonably request in connection with the transactions contemplated by this Remarketing Agreement, and if the remarketing is effected pursuant to a registration statement in accordance with Section 6 hereof, make reasonably available to the Remarketing Agent and any accountant, attorney or other advisor retained by the Remarketing Agent such information that parties would customarily require in connection with a due diligence investigation conducted in accordance with applicable securities laws and cause the Company's officers, directors, employees and accountants to participate in such discussions and to supply all such information reasonably requested by the Remarketing Agent and its advisors in connection with such investigation. IN WITNESS WHEREOF, each of the Company, the Forward Purchase Contract Agent and the Remarketing Agent has caused this Agreement to be executed in its name and on its behalf by one of its duly authorized signatories as of the date first above written. AMERICAN ELECTRIC POWER COMPANY, INC. By:______________________________ Name: Title: SALOMON SMITH BARNEY INC., as Remarketing Agent By:_______________________________ Name: Title: CONFIRMED AND ACCEPTED: THE BANK OF NEW YORK not individually but solely as Forward Purchase Contract Agent and as attorney-in-fact for the Holders of the Forward Purchase Contracts By:__________________________ Name: Title: EX-4.8 9 dex48.txt EXHIBIT 4.8 Exhibit 4.8 COMMON STOCK COMMON STOCK CERTIFICATE NUMBER THIS CERTIFICATE IS TRANSFERABLE IN CANTON, MA, JERSEY CITY, NJ OR NEW YORK, NY INCORPORATED OF THE STATE UNDER THE LAWS OF NEW YORK AMERICAN ELECTRIC POWER COMPANY, INC. CUSIP 025537 10 1 SEE REVERSE FOR CERTAIN DEFINITIONS This Certifies that is the owner of FULL-PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF American Electric Power Company, Inc., transferable on the books of the Company in person or by duly authorized attorney upon surrender of the certificate properly endorsed. This certificate and the shares represented hereunder are issued and shall be held subject to all provisions of the Restated Certificate of Incorporation, as amended, of the Company (a copy of which is on file with the Transfer Agent) to all of which the holder, by acceptance hereof, assents. This certificate is not valid until countersigned and registered by the Transfer Agent and Registrar. Witness the seal of the Company and the signatures of its duly authorized officers. COUNTERSIGNED AND REGISTERED: EQUISERVE TRUST COMPANY, N.A. TRANSFER AGENT AND REGISTRAR BY AUTHORIZED SIGNATURE TREASURER CHAIRMAN OF THE BOARD AMERICAN ELECTRIC POWER COMPANY, INC. CORPORATE SEAL NEW YORK The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws and regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT - ___ Custodian ______ (Cust) (Minor) TEN ENT - as tenants by the entireties under Uniform Gifts to Minors Act _________________________________ JT TEN - as joint tenants with right of (State) survivorship and not as tenants in common
Additional abbreviations may also be used though not in the above list. For value received, _________________________ hereby sell, assign and transfer unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE ________________________________________________________________________________ ________________________________________________________________________________ (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE) ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________ Shares of the capital stock represented by the within Certificate, and do hereby irrevocably constitute and appoint______________________________________________ _____________________ Attorney to transfer the said Stock registered on the books of the within-named Company with full power of substitution in the premises. Dated ___________________ ____________________________________ THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THIS CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER. THE SIGNATURE OF THE PERSON EXECUTING THIS POWER MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION SUCH AS A COMMERCIAL BANK, TRUST COMPANY, SECURITIES BROKER/DEALER, CREDIT UNION OR A SAVINGS ASSOCIATION PARTICIPATING IN A MEDALLION PROGRAM APPROVED BY THE SECURITIES TRANSFER ASSOCIATION, INC. EX-5.A1 10 dex5a1.txt EXHIBIT 5.A1 Exhibit 5.a.1 June 11, 2002 American Electric Power Company, Inc. 1 Riverside Plaza Columbus, Ohio 43215 Ladies and Gentlemen: We have acted as counsel to American Electric Power Company, Inc. a New York corporation (the "Company"), in connection with the Registration Statement on Form S-3 (Registration No. 333-86050), as amended by Amendment No. 1 thereto (the "Registration Statement") filed by the Company with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Act"), relating to (i) 16,000,000 shares of Common Stock of the Company, par value $6.50 per share (the "Common Stock") and (ii) 6,000,000 9.25% Equity Units of the Company, consisting of (a) a Forward Purchase Contract (the "Forward Purchase Contracts") and (b) a 5.75% Senior Note (the "Senior Notes"). The Senior Notes were issued under an Indenture dated as of May 1, 2001, as amended and supplemented by a Third Supplemental Indenture dated as of June 11, 2002 (the "Senior Indenture") between the Company and The Bank of New York, as Trustee (the "Senior Trustee"). The Forward Purchase Contracts were issued pursuant to a Forward Purchase Contract Agreement (the "Forward Purchase Contract Agreement") dated as June 11, 2002 between the Company and The Bank of New York, as Forward Purchase Contract Agent (the "Forward Purchase Contract Agent"). We have examined the Registration Statement, a form of the share certificate, the Senior Indenture and the Forward Purchase Contract Agreement, which have been filed with the Commission as exhibits to the Registration Statement. We also have examined the originals, or duplicates or certified or conformed copies, of such records, agreements, instruments and other documents and have made such other and further investigations as we have deemed relevant and necessary in connection with the opinions expressed herein. As to questions of fact material to this opinion, we have relied upon certificates of public officials and of officers and representatives of the Company. 2 In rendering the opinions set forth below, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as duplicates or certified or conformed copies, and the authenticity of the originals of such latter documents. We also have assumed that: (1) the Senior Indenture is the valid and legally binding obligation of the Senior Trustee and (2) the Forward Purchase Contract Agreement is the valid and legally binding obligation of the Forward Purchase Contract Agent. Based upon the foregoing, and subject to the qualifications and limitations stated herein, we are of the opinion that: 1. The Common Stock is validly issued, fully paid and nonassessable. 2. Assuming the due authentication thereof by the Senior Trustee, the Senior Notes constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms. 3. Assuming the due authentication thereof by the Forward Purchase Contract Agent, the Forward Purchase Contracts constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms. Our opinions set forth in paragraph 2 and 3 above are subject to the effects of (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, (ii) general equitable principles (whether considered in a proceeding in equity or at law) and (iii) an implied covenant of good faith and fair dealing. We are members of the Bar of the State of New York, and we do not express any opinion herein concerning any law other than the law of the State of New York and the Federal law of the United States. We hereby consent to the filing of this opinion letter as Exhibit 5.a.1 to the Registration Statement and to the use of our name under the caption "Legal Opinions" in the Prospectus included in the Registration Statement. Very truly yours SIMPSON THACHER & BARTLETT EX-8.1 11 dex81.txt EXHIBIT 8.1 Exhibit 8.1 June 6, 2002 RE: Issuance and Sale of Equity Units --------------------------------- American Electric Power Company, Inc. One Riverside Plaza Columbus, Ohio 43215 Ladies and Gentlemen: We have acted as tax counsel to American Electric Power Company, Inc., a New York corporation (the "Company"), in connection with the preparation and filing by the Company with the Securities and Exchange Commission (the "Commission") of the Prospectus Supplement dated June 5, 2002 to the Prospectus dated May 17, 2002 (together, the "Prospectus"), which formed a part of the Registration Statement on Form S-3 filed with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (the "Registration Statement"), in respect of the issuance of 6,000,000 (plus an additional 900,000 if the over-allotment option is exercised in full by the underwriters) Equity Units (the "Equity Units"), consisting of units initially comprised of (i) a purchase contract under which the holder agrees to purchase, and the Company agrees to sell, shares of common stock of the Company on or before August 16, 2005 (a "Purchase Contract") and (ii) a 5.75% Company Senior Note due August 16, 2007 having a $50 stated principal amount (a "Senior Note"). All capitalized terms used in this opinion letter and not otherwise defined herein shall have the meanings ascribed to such terms in the Registration Statement. -2- In delivering this opinion letter, we have reviewed and relied upon (i) the Prospectus; (ii) a form of the Indenture; (iii) a form of the Third Supplemental Indenture; (iv) a form of the Senior Note; (v) a form of the Purchase Contract Agreement; (vi) forms of the Global Stripped Units Certificates; (vii) forms of the Global Equity Units Certificates; (viii) a form of the Remarketing Agreement; (ix) a form of the Pledge Agreement; and (x) a form of the Underwriting Agreement. We also have examined and relied upon originals, or duplicates or certified or conformed copies, of such records of the Company and such other documents, certificates, representations and records as we have deemed necessary or appropriate as a basis for the opinion set forth herein. In such examination, we have assumed the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as drafts or as duplicates or certified or conformed copies, and the authenticity of the originals of such latter documents. In addition, we also have assumed that factual representations made to us are true, correct and complete and that the transactions related to the issuance of the Equity Units and the Senior Notes will be consummated in accordance with the terms of the documents and forms of documents described herein. If any of the above described assumptions are untrue for any reason or if the issuance of the Equity Units and the Senior Notes is consummated in a manner that is inconsistent with the manner in which it is described in the Registration Statement, our opinion as expressed below may be adversely affected and may not be relied upon. Based on the foregoing, it is our opinion that the statements made in the Prospectus under the caption "United States Federal Income Tax Consequences", insofar as they purport to constitute summaries of matters of United States federal tax law and regulations or legal conclusions with respect thereto, constitute accurate summaries of the matters described -3- therein in all material respects. We express no opinion with respect to the transactions referred to herein or in the Prospectus other than as expressly set forth herein. Our opinion is based upon the Internal Revenue Code of 1986, as amended, the Treasury regulations promulgated thereunder and other relevant authorities and law, all as in effect on the date hereof. Consequently, future changes in the law may cause the tax treatment of the transactions referred to herein to be materially different from that described in the Prospectus. We disclaim any undertaking to advise you of any subsequent changes of the matters stated, represented or assumed herein or any subsequent changes in applicable law, regulations or interpretations thereof. We are members of the Bar of the State of New York, and we do not express any opinion herein concerning any law other than the federal law of the United States. We consent to the filing of this opinion as an exhibit to the Form 8-K to be filed with the Securities and Exchange Commission and to the reference to our firm under the heading "Legal Matters" in the Prospectus that forms a part of the Registration Statement. Very truly yours, SIMPSON THACHER & BARTLETT -----END PRIVACY-ENHANCED MESSAGE-----