PE ENVIRONMENTAL FUNDING LLC PE RENAISSANCE FUNDING, LLC THE POTOMAC EDISON COMPANY $114,825,000 SENIOR SECURED SINKING FUND ENVIRONMENTAL CONTROL BONDS, SERIES A UNDERWRITING AGREEMENT April 3, 2007
Exhibit
1.2
PE
ENVIRONMENTAL FUNDING LLC
PE
RENAISSANCE FUNDING, LLC
THE
POTOMAC EDISON COMPANY
$114,825,000
SENIOR SECURED SINKING FUND ENVIRONMENTAL CONTROL BONDS, SERIES
A
April
3,
2007
To
the
Representative Named in Schedule I
Hereto
of
the Several Underwriters
Named
in
Schedule II hereto
Ladies
and Gentlemen:
1. Introduction.
PE Environmental Funding LLC, a Delaware limited liability company (the
“Issuer”),
proposes to issue and sell $114,825,000 aggregate principal amount of its
Senior
Secured Sinking Fund Environmental Control Bonds, Series A (the
“Bonds”),
identified in Schedule
I
hereto.
The Issuer’s direct parent is PE Renaissance Funding, LLC, a special purpose
Delaware limited liability company (“PE
Renaissance”)
established to hold and convey to the Issuer certain environmental control
property (as more fully described in the Financing Order relating to the
Bonds,
the “Environmental
Control Property”).
PE
Renaissance is a wholly-owned subsidiary of The Potomac Edison Company, a
Maryland and Virginia corporation (“Potomac
Edison”).
The
Issuer, Potomac Edison and PE Renaissance hereby confirm their agreement
with
the several Underwriters (as defined below) as set forth herein.
The
term
“Underwriters”
as
used
herein shall be deemed to mean the entity or several entities named in
Schedule
II
hereto
and any underwriter substituted as provided in Section 8 hereof and the term
“Underwriter”
shall
be deemed to mean any one of such Underwriters. If the entity or entities
listed
in Schedule
I
hereto
(the “Representatives”)
are
the same as the entity or entities listed in Schedule
II
hereto,
then the terms “Underwriters”
and
“Representatives”,
as
used herein, shall each be deemed to refer to such entity or entities. All
obligations of the Underwriters hereunder are several and not joint. If more
than one entity is named in Schedule
I
hereto,
any action under or in respect of this underwriting agreement (“Underwriting
Agreement”)
may be
taken by such entities jointly as the Representatives or by one of the entities
acting on behalf of the Representatives and such action will be binding upon
all
the Underwriters.
Capitalized
terms used and not otherwise defined in this Underwriting Agreement shall
have
the meanings given to them in the Indenture (as defined below).
2. Description
of the Bonds.
The
Bonds will be issued pursuant to an Indenture to be dated as of April 1,
2007,
as supplemented by one or more series supplements
thereto
(as so supplemented, the “Indenture”),
between the Issuer and U.S. Bank National Association, as indenture trustee
(the
“Indenture
Trustee”).
Potomac Edison will transfer the Environmental Control Property to PE
Renaissance pursuant to the Environmental Control Property Transfer Agreement,
to be dated as of April 1, 2007, between PE Renaissance and Potomac Edison
(the
“Transfer
Agreement”).
The
Bonds will be obligations of the Issuer and will be supported by the transferred
Environmental Control Property (“Transferred
Environmental Control Property”),
to be
sold to the Issuer by PE Renaissance pursuant to the Transferred Environmental
Control Property Sale Agreement, to be dated as of April 1, 2007, between
PE Renaissance and the Issuer (the “Sale
Agreement”).
The
Transferred Environmental Control Property will be serviced pursuant to the
Transferred Environmental Control Property Servicing Agreement, to be dated
as
of April 1, 2007, between Potomac Edison, as servicer, and the Issuer, as
owner of the Transferred Environmental Control Property sold to it pursuant
to
the Sale Agreement (the “Servicing
Agreement”).
3. Representations
and Warranties of the Issuer.
The Issuer represents and warrants to the several Underwriters
that:
(a) The
Issuer and the Bonds meet the requirements for the use of Form S-1 under
the
Securities Act of 1933, as amended (the “Securities
Act”),
and
the Issuer has filed with the Securities and Exchange Commission (the
“Commission”)
a
registration statement on such form on January 11, 2007 (Registration No.
333-139937), as amended by Amendment No. 1 thereto dated March 19, 2007,
including a form of prospectus, for the registration under the Securities
Act of
up to $115,000,000 aggregate principal amount of the Bonds. Such registration
statement, as amended (“Registration
Statement No. 333-139937”),
has
been declared effective by the Commission and no stop order suspending such
effectiveness has been issued under the Securities Act and no proceedings
for
that purpose have been instituted or are pending or, to the knowledge of
the
Issuer, threatened by the Commission. No environmental control bonds registered
with the Commission under the Securities Act pursuant to Registration Statement
No. 333-139937 have been previously issued. References herein to the term
“Registration
Statement”
shall
be deemed to refer to Registration Statement No. 333-139937, including any
amendment thereto, and any information in a prospectus or a prospectus
supplement deemed or retroactively deemed to be a part thereof pursuant to
Rule
430A (“Rule
430A”)
or
Rule 430C (“Rule
430C”)
under
the Securities Act that has not been superseded or modified. “Registration
Statement” without reference to a time means the Registration Statement as of
the Applicable Time (as defined below), which the parties agree is the time
of
the first Contract of Sale (as used in Rule 159 under the Securities Act)
for
the Bonds, and shall be considered the “Effective
Date”
of
the
Registration Statement relating to the Bonds. For purposes of this definition,
information contained in a form of prospectus or prospectus supplement that
is
deemed retroactively to be a part of the Registration Statement pursuant
to Rule
430A or Rule 430C, shall be considered to be included in the Registration
Statement as of the time specified in Rule 430A or Rule 430C, as appropriate.
The final prospectus relating to the Bonds, as filed with the Commission
pursuant to Rule 424(b) under the Securities Act (“Rule
424(b)”),
is
referred to herein as the “Final
Prospectus;”
and
the most recent preliminary prospectus that omitted information to be included
upon pricing in a form of prospectus filed with the Commission pursuant to
Rule
424(b) and that was used after the initial effectiveness of the Registration
Statement and prior to the Applicable Time (as defined below) is referred
to
herein as the “Pricing
Prospectus.”
The
Issuer is not, and
2
at
the
time of filing the Registration Statement was not, an “ineligible issuer” as
defined under Rule 405 of the Securities Act (“Rule
405”).
(b) (i)
At the earliest time after the filing of the Registration Statement that
the
Issuer or another offering participant made a bona
fide offer
(within the meaning of Rule 164(h)(2) under the Securities Act) of the Bonds
and
(ii) at the date hereof, the Issuer was not and is not an “ineligible
issuer,” as defined in Rule 405.
(c) At
the
time the Registration Statement initially became effective, at the time of
each
amendment thereto for the purposes of complying with Section 10(a)(3) of
the
Securities Act (whether by post-effective amendment, incorporated report
or form
of prospectus) and on the Effective Date relating to the Bonds, the Registration
Statement, and the Indenture, at the Closing Date (as defined below), fully
complied and will fully comply in all material respects with the applicable
requirements of the Securities Act, the Trust Indenture Act of 1939 (the
“Trust
Indenture Act”)
and,
in each case, the applicable instructions, rules and regulations of the
Commission thereunder; the Registration Statement, at each of the aforementioned
dates, did not and will not include any untrue statement of a material fact
or
omit to state any material fact required to be stated therein or necessary
to
make the statements therein, in light of the circumstances in which they
were
made, not misleading. As of the Applicable Time (as defined below) and as
of the
Closing Date, the Registration Statement and the Final Prospectus fully complied
and will fully comply in all material respects with the applicable requirements
of the Securities Act, the Trust Indenture Act and the applicable rules and
regulations of the Commission thereunder, and neither of such documents includes
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances in which they were made, not
misleading; provided that the foregoing representations and warranties in
this
paragraph (c) shall not apply to statements or omissions made in reliance
upon
information furnished in writing to the Issuer or Potomac Edison by, or on
behalf of, any Underwriter through the Representatives expressly for use
in
connection with the preparation of the Registration Statement or the Final
Prospectus or to any statements in or omissions from any Statements of
Eligibility on Form T-1 (or amendments thereto) of the Indenture Trustee
filed
as exhibits to the Registration Statement or to any statements or omissions
made
in the Registration Statement or the Final Prospectus relating to The Depository
Trust Company (“DTC”)
Book-Entry System that are based solely on information contained in published
reports of the DTC.
(d) As
of its
date, at the Applicable Time (as defined below) and on the date of its filing,
if applicable, and on the Closing Date, the Pricing Prospectus and each Issuer
Free Writing Prospectus (as defined below) (other than the Pricing Term Sheet,
as defined in Section 6(b) below), considered together, did not include any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
in
which they were made, not misleading (except that (i) the principal amount
of
the Bonds, the tranches, the initial principal balances, the scheduled final
payment dates, the final maturity dates, the expected average lives, and
the
Expected Sinking Fund Schedule described in the Pricing Prospectus supersede
any
previously issued descriptions of such information and (ii) the interest
rate,
price to the public and underwriting discounts and commissions for each tranche
was not included in the Pricing Prospectus). The Pricing Term Sheet, as of
its
issue date and at all subsequent times through the completion of the public
offer and sale of the Bonds, considered
3
together
with the Pricing Prospectus and each other Issuer Free Writing Prospectus,
did
not include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light
of
the circumstance in which they are made, not misleading. The two preceding
sentences do not apply to statements in or omissions from the Pricing
Prospectus, the Pricing Term Sheet or any other Issuer Free Writing Prospectus
in reliance upon and in conformity with written information furnished to
the
Issuer or Potomac Edison by any Underwriter through the Representatives
specifically for use therein, it being understood and agreed that the only
such
information furnished by any Underwriter consists of the information set
forth
in Schedule
IV
hereto.
“Issuer
Free Writing Prospectus”
means
any “issuer free writing prospectus,” as defined in Rule 433(h) under the
Securities Act, relating to the Bonds, in the form filed or required to be
filed
with the Commission or, if not required to be filed, in the form retained
in the
Issuer’s records pursuant to Rule 433(g) under the Securities Act. References to
the term “Free
Writing Prospectus”
shall
mean a free writing prospectus, as defined in Rule 405. References to the
term
“Applicable
Time”
mean
3:45 P.M., eastern time, on the date hereof, except that if, subsequent to
such
Applicable Time, the Issuer, Potomac Edison and the Underwriters have determined
that the information contained in the Pricing Prospectus or any Issuer Free
Writing Prospectus issued prior to such Applicable Time included an untrue
statement of a material fact or omitted to state a material fact necessary
in
order to make the statements therein, in the light of the circumstances in
which
they were made, not misleading and have terminated their old purchase contracts
and entered into new purchase contracts with purchasers of the Bonds, then
“Applicable Time” will refer to the first of such times when such new purchase
contracts are entered into. The Issuer represents, warrants and agrees that
it
has treated and agrees that it will treat each of the free writing prospectuses
listed on Schedule
III
hereto
as an Issuer Free Writing Prospectus, and that each such Free Writing Prospectus
has fully complied and will fully comply with the applicable requirements
of
Rule 164 (“Rule
164”)
and
Rule 433 (“Rule
433”)
under
the Securities Act, including timely Commission filing where required, legending
and record keeping.
(e) Each
Issuer Free Writing Prospectus, as of its issue date and at all subsequent
times
through the Closing Date or until any earlier date that Potomac Edison, PE
Renaissance or the Issuer notified or notifies the Representatives as described
in the next sentence, did not, does not and will not include any information
that conflicted, conflicts or will conflict with the information then contained
in the Registration Statement. If at any time following issuance of an Issuer
Free Writing Prospectus there occurred or occurs an event or development
as a
result of which such Issuer Free Writing Prospectus conflicted or would conflict
with the information then contained in the Registration Statement or included
or
would include an untrue statement of a material fact or omitted or would
omit to
state a material fact necessary in order to make the statements therein,
in the
light of the circumstances prevailing at that subsequent time, not misleading,
(i) Potomac Edison, PE Renaissance or the Issuer has promptly notified or
will promptly notify the Representatives and (ii) Potomac Edison, PE
Renaissance or the Issuer has promptly amended or will promptly amend or
supplement such Issuer Free Writing Prospectus to eliminate or correct such
conflict, untrue statement or omission. The foregoing two sentences do not
apply
to statements in or omissions from any Issuer Free Writing Prospectus in
reliance upon and in conformity with written information furnished to Potomac
Edison, PE Renaissance or the Issuer by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such
4
information
furnished by any Underwriter consists of the information set forth on
Schedule
IV
hereto.
(f) The
Issuer has been duly formed and is validly existing as a limited liability
company in good standing under the Limited Liability Company Act of the State
of
Delaware, as amended, with full limited liability company power and authority
to
execute, deliver and perform its obligations under this Underwriting Agreement,
the Bonds, the Sale Agreement, the Servicing Agreement, the Indenture, the
Issuer Administration Agreement and the other agreements and instruments
contemplated by the Pricing Prospectus (collectively, the “Issuer
Documents”)
and to
own its properties and conduct its business as described in the Pricing
Prospectus; the Issuer has been duly qualified as a foreign limited liability
company for the transaction of business and is in good standing under the
laws
of each other jurisdiction in which it owns or leases properties or conducts
any
business so as to require such qualification, except where failure to so
qualify
or to be in good standing would not have a material adverse effect on the
business, properties or financial condition of the Issuer; the Issuer has
conducted and will conduct no business in the future that would be inconsistent
with the description of the Issuer’s business set forth in the Pricing
Prospectus; the Issuer is not a party to or bound by any agreement or instrument
other than the Issuer Documents and other agreements or instruments incidental
to its formation; the Issuer has no material liabilities or obligations other
than those arising out of the transactions contemplated by the Issuer Documents
and as described in the Pricing Prospectus; PE Renaissance is the beneficial
owner of all of the limited liability company interests of the Issuer; and
based
on current law, the Issuer is not classified as an association taxable as
a
corporation for United States federal income tax purposes.
(g) The
issuance and sale of the Bonds by the Issuer, the purchase of the Transferred
Environmental Control Property by the Issuer from PE Renaissance and the
consummation of the transactions herein contemplated by the Issuer, and the
fulfillment of the terms hereof on the part of the Issuer to be fulfilled,
will
not result in a breach of any of the terms or provisions of, or constitute
a
default under the Issuer’s certificate of formation or the Issuer LLC Agreement
(collectively, the “Issuer
Formation Documents”),
or
any indenture, mortgage, deed of trust or other agreement or instrument to
which
the Issuer is now a party.
(h) This
Underwriting Agreement has been duly authorized, executed and delivered by
the
Issuer, which has the necessary limited liability company power and authority
to
execute, deliver and perform its obligations under this Underwriting Agreement,
and constitutes a valid and binding obligation of the Issuer, enforceable
against the Issuer in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, receivership,
moratorium or other similar laws relating to or affecting creditors’ or secured
parties’ rights generally and by general principles of equity (including
concepts of materiality, reasonableness, good faith and fair dealing),
regardless of whether considered in a proceeding in equity or at law; and
limitations on enforceability of rights to indemnification or contribution
by
federal or state securities laws or regulations or by public
policy.
(i) The
Issuer (i) is not in violation of the Issuer Formation Documents,
(ii) is not in default and no event has occurred which, with notice or
lapse of time or both, would constitute such a default, in the due performance
or observance of any term, covenant or condition contained in any indenture,
mortgage, deed of trust or other agreement or instrument to
5
which
it
is a party or by which it is bound or to which any of its properties is subject,
except for any such defaults that would not, individually or in the aggregate,
have a material adverse effect on its business, property or financial condition,
and (iii) is not in violation of any law, ordinance, governmental rule,
regulation or court decree to which it or its property may be subject, except
for any such violations that would not, individually or in the aggregate,
have a
material adverse effect on its business, property or financial
condition.
(j) The
Indenture has been duly authorized by the Issuer, and, on the Closing Date,
will
have been duly executed and delivered by the Issuer and will be a valid and
binding instrument, enforceable against the Issuer in accordance with its
terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar laws relating to
or
affecting creditors’ or secured parties’ rights generally and by general
principles of equity (including concepts of materiality, reasonableness,
good
faith and fair dealing), regardless of whether considered in a proceeding
in
equity or at law; and limitations on enforceability of rights to indemnification
by federal or state securities laws or regulations or by public policy. On
the
Closing Date, the Indenture will (i) comply as to form in all material
respects with the requirements of the Trust Indenture Act and (ii) conform
in all material respects to the description thereof in the Pricing Prospectus
and Final Prospectus.
(k) The
Bonds
have been duly authorized by the Issuer for issuance and sale to the
Underwriters pursuant to this Underwriting Agreement and, when executed by
the
Issuer and authenticated by the Indenture Trustee in accordance with the
Indenture and delivered to the Underwriters against payment therefor in
accordance with the terms of this Underwriting Agreement, will constitute
valid
and binding obligations of the Issuer entitled to the benefits of the Indenture
and enforceable against the Issuer in accordance with their terms, except
as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other similar laws relating to or affecting
creditors’ or secured parties’ rights generally and by general principles of
equity (including concepts of materiality, reasonableness, good faith and
fair
dealing), regardless of whether considered in a proceeding in equity or at
law;
and limitations on enforceability of rights to indemnification by federal
or
state securities laws or regulations or by public policy, and the Bonds conform
in all material respects to the description thereof in the Pricing Prospectus
and Final Prospectus. The Issuer has all requisite limited liability company
power and authority to issue, sell and deliver the Bonds in accordance with
and
upon the terms and conditions set forth in this Underwriting Agreement and
in
the Pricing Prospectus and Final Prospectus.
(l) Other
than as set forth or contemplated in the Pricing Prospectus, there is no
litigation or governmental proceeding to which the Issuer is a party or to
which
any property of the Issuer is subject or which is pending or, to the knowledge
of the Issuer, threatened against the Issuer that would reasonably be expected
to, individually or in the aggregate, result in a material adverse effect
on the
Issuer’s business, property or financial condition.
(m) Other
than any necessary action of the PSCWV, any filings required under the Statute
or the Financing Order or as otherwise set forth or contemplated in the Pricing
Prospectus, no approval, authorization, consent or order of any public board
or
body (except such as have been already obtained and other than in connection
or
in compliance with the provisions of applicable blue-sky laws or securities
laws
of any state, as to which the Issuer
6
makes
no
representations or warranties), is legally required for the issuance and
sale by
the Issuer of the Bonds.
(n) The
Issuer is not, and, after giving effect to the sale and issuance of the Bonds
and application of the proceeds as described in the Final Prospectus, will
not
be, an “investment company” within the meaning of the Investment Company Act of
1940, as amended (the “1940
Act”).
(o) Each
of
the Sale Agreement, the Servicing Agreement and the Issuer Administration
Agreement has been duly authorized by the Issuer, and when executed and
delivered by the Issuer and the other parties thereto, will constitute a
valid
and legally binding obligation of the Issuer, enforceable against the Issuer
in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization, receivership, moratorium or other
similar laws relating to or affecting creditors’ or secured parties’ rights
generally and by general principles of equity (including concepts of
materiality, reasonableness, good faith and fair dealing), regardless of
whether
considered in a proceeding in equity or at law, and limitations on
enforceability of rights to indemnification by federal or state securities
laws
or regulations or by public policy.
4. Representations
and Warranties of Potomac Edison.
Potomac Edison represents and warrants to the several Underwriters
that:
(a) At
the
time the Registration Statement initially became effective, at the time of
each
amendment thereto for the purposes of complying with Section 10(a)(3) of
the Act
(whether by post effective amendment, incorporated report or form of prospectus)
and on the Effective Date relating to the Bonds, the Registration Statement,
and
the Indenture, on the Closing Date, fully complied and will fully comply
in all
material respects with the applicable requirements of the Securities Act,
the
Trust Indenture Act and the applicable rules and regulations of the Commission
thereunder; the Registration Statement, at each of the aforementioned dates,
did
not and will not include any untrue statement of a material fact or omit
to
state any material fact required to be stated therein or necessary to make
the
statements therein, in the light of the circumstances in which they were
made,
not misleading. As of the Applicable Time and as of the Closing Date, the
Registration Statement and the Final Prospectus fully complied and will fully
comply in all material respects to the requirements of the Securities Act,
the
Trust Indenture Act and the applicable rules and regulations of the Commission
thereunder, and neither of such documents includes any untrue statement of
a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances in which they were made, not misleading; provided, that the
foregoing representations and warranties in this paragraph (a) shall not
apply
to statements or omissions made in reliance upon and in conformity with
information furnished in writing to Potomac Edison, PE Renaissance or the
Issuer
by, or on behalf of, any Underwriter through the Representatives expressly
for
use in connection with the preparation of the Registration Statement or the
Final Prospectus, or to any statements in or omissions from any Statement
of
Eligibility on Form T 1, or amendments thereto, of the Indenture Trustee
filed
as exhibits to the Registration Statement or to any statements or omissions
made
in the Registration Statement or Final Prospectus relating to the DTC
Book-Entry-Only System that are based solely on information contained in
published reports of DTC.
7
(b) As
of its
date, at the Applicable Time, on the date of its filing, if applicable, and
on
the Closing Date, the Pricing Prospectus and each Issuer Free Writing Prospectus
(other than the Pricing Term Sheet), considered together, did not include
any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
in
which they were made, not misleading (except that (i) the principal amount
of the Bonds, the tranches, the initial principal balances, the scheduled
final
payment dates, the final maturity dates, the expected average lives, and
the
Expected Sinking Fund Schedule described in the Pricing Prospectus supersede
any
previously issued descriptions of such information and (ii) the interest
rate, price to the public and underwriting discounts and commissions for
each
tranche was not included in the Pricing Prospectus). The Pricing Term Sheet,
as
of its issue date and at all subsequent times through the completion of the
public offer and sale of the Bonds, considered together with the Pricing
Prospectus and each other Issuer Free Writing Prospectus, did not include
any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
in
which they were made, not misleading. The two preceding sentences do not
apply
to statements in or omissions from the Pricing Prospectus, the Pricing Term
Sheet or any Issuer Free Writing Prospectus in reliance upon and in conformity
with written information furnished to Potomac Edison, PE Renaissance or the
Issuer by any Underwriter through the Representatives specifically for use
therein, it being understood and agreed that the only such information furnished
by any Underwriter consists of the information set forth in Schedule
IV
hereto.
Potomac Edison represents, warrants and agrees that it has treated and agrees
that it will treat each of the free writing prospectuses listed on Schedule
III
hereto
as an Issuer Free Writing Prospectus, and that each such Issuer Free Writing
Prospectus has fully complied and will fully comply with the applicable
requirements of Rule 164 and Rule 433, including timely Commission filing
where
required, legending and record keeping
(c) Each
Issuer Free Writing Prospectus, as of its issue date and at all subsequent
times
through the completion of the public offer and sale of the Bonds or until
any
earlier date that Potomac Edison, PE Renaissance or the Issuer notified or
notifies the Representatives as described in the next sentence, did not,
does
not and will not include any information that conflicted, conflicts or will
conflict with the information then contained in the Registration Statement.
If
at any time following issuance of an Issuer Free Writing Prospectus there
occurred or occurs an event or development as a result of which such Issuer
Free
Writing Prospectus conflicted or would conflict with the information then
contained in the Registration Statement or included or would include an untrue
statement of a material fact or omitted or would omit to state a material
fact
necessary in order to make the statements therein, in the light of the
circumstances prevailing at that subsequent time, not misleading,
(i) Potomac Edison, PE Renaissance or the Issuer has promptly notified or
will promptly notify the Representatives and (ii) Potomac Edison, PE
Renaissance or the Issuer has promptly amended or will promptly amend or
supplement such Issuer Free Writing Prospectus to eliminate or correct such
conflict, untrue statement or omission. The foregoing two sentences do not
apply
to statements in or omissions from any Issuer Free Writing Prospectus in
reliance upon and in conformity with written information furnished to Potomac
Edison, PE Renaissance or the Issuer by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information set forth on Schedule
IV
hereto.
8
(d) Potomac
Edison has been duly formed and is validly existing as a corporation in good
standing under the laws of the States of Maryland and Virginia, has the
corporate power and authority to execute, deliver and perform its obligations
under this Underwriting Agreement, the Servicing Agreement, the Transfer
Agreement and the other agreements and instruments contemplated by the Pricing
Prospectus (collectively, the “Potomac
Edison Documents”)
and to
own, lease and operate its properties and to conduct its business as presently
conducted and as set forth in or contemplated by the Pricing Prospectus,
and is
qualified as a foreign corporation to transact business and is in good standing
in each jurisdiction in which such qualification is required, whether by
reason
of the ownership or leasing of property or the conduct of business, except
where
the failure to so qualify or be in good standing would not have a material
adverse effect on the business, property or financial condition of Potomac
Edison and its subsidiaries considered as a whole; Potomac Edison has conducted
its business in a manner that is not inconsistent with the description of
Potomac Edison’s business in the Pricing Prospectus. Potomac Edison is the
beneficial owner of all of the limited liability company interests of the
PE
Renaissance and such interests are owned free and clear of all liens,
encumbrances, equities or claims.
(e) Potomac
Edison has no significant subsidiaries within the meaning of Rule 1-02(w)
of
Regulation S-X under the Securities Exchange Act of 1934, as amended (the
“Exchange
Act”).
(f) The
conveyance by Potomac Edison of the Environmental Control Property to PE
Renaissance and the consummation of the transactions herein contemplated
by
Potomac Edison, and the fulfillment of the terms hereof on the part of Potomac
Edison to be fulfilled, will not result in a breach of any of the terms or
provisions of, or constitute a default under, Potomac Edison’s articles of
incorporation or bylaws (collectively, the “Potomac
Edison Charter Documents”),
or in
a material breach of any of the terms of, or constitute a material default
under, any indenture, mortgage, deed of trust or other agreement or instrument
to which Potomac Edison is now a party.
(g) This
Underwriting Agreement has been duly authorized, executed and delivered by
Potomac Edison, which has the necessary corporate power and authority to
execute, deliver and perform its obligations under this Underwriting Agreement,
and constitutes a valid and binding obligation of Potomac Edison, enforceable
against Potomac Edison in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other similar laws relating to or affecting
creditors’ or secured parties’ rights generally and by general principles of
equity (including concepts of materiality, reasonableness, good faith and
fair
dealing), regardless of whether considered in a proceeding in equity or at
law,
and limitations on enforceability of rights to indemnification or contribution
by federal or state securities laws or regulations or by public
policy.
(h) Potomac
Edison (i) is not in violation of Potomac Edison Charter Documents,
(ii) is not in default and no event has occurred which, with notice or
lapse of time or both, would constitute such a default, in the due performance
or observance of any term, covenant or condition contained in any indenture,
mortgage, deed of trust or other agreement or instrument to which it is a
party
or by which it is bound or to which any of its properties is subject, except
for
any such defaults that would not, individually or in the aggregate, have
a
9
material
adverse effect on the business, property or financial condition of Potomac
Edison and its subsidiaries considered as a whole, or (iii) is not in
violation of any law, ordinance, governmental rule, regulation or court decree
to which it or its property may be subject, except for any such violations
that
would not, individually or in the aggregate, have a material adverse effect
on
the business, property or financial condition of Potomac Edison and its
subsidiaries considered as a whole.
(i) Except
as
set forth or contemplated in the Pricing Prospectus, there is no litigation
or
governmental proceeding to which Potomac Edison or any of its subsidiaries
is a
party or to which any property of Potomac Edison or any of its subsidiaries
is
subject or which is pending or, to the knowledge of Potomac Edison, threatened
against Potomac Edison or any of its subsidiaries that would reasonably be
expected to, individually or in the aggregate, result in a material adverse
effect on the Issuer’s business, property, or financial condition or on Potomac
Edison’s ability to perform its obligations under the Sale Agreement and the
Servicing Agreement.
(j) Other
than any necessary action of the PSCWV, any filings required under the Statute
or Financing Order or as otherwise set forth or contemplated in the Pricing
Prospectus, no approval, authorization, consent or order of any public board
or
body (except such as have been already obtained and other than in connection
or
in compliance with the provisions of applicable blue-sky laws or securities
laws
of any state, as to which Potomac Edison makes no representations or
warranties), is legally required for the issuance and sale by the Issuer
of the
Bonds.
(k) Neither
Potomac Edison, PE Renaissance nor the Issuer is, and after giving effect
to the
sale and issuance of the Bonds and application of the proceeds as described
in
the Final Prospectus, neither Potomac Edison, PE Renaissance nor the Issuer
will
be, an “investment company” within the meaning of the 1940 Act.
(l) Each
of
the Transfer Agreement and the Servicing Agreement has been duly and validly
authorized by Potomac Edison, and when executed and delivered by Potomac
Edison
and the other parties thereto each will constitute a valid and legally binding
obligation of Potomac Edison, enforceable against Potomac Edison in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, receivership, moratorium or other
similar laws relating to or affecting creditors’ or secured parties’ rights
generally and by general principles of equity (including concepts of
materiality, reasonableness, good faith and fair dealing), regardless of
whether
considered in a proceeding in equity or at law, and limitations on
enforceability of rights to indemnification by federal or state securities
laws
or regulations or by public policy.
(m) There
are
no West Virginia transfer taxes related to the transfer of the Environmental
Control Property or the Transferred Environmental Control Property or the
issuance and sale of the Bonds to the Underwriters pursuant to this Underwriting
Agreement required to be paid at or prior to the Closing Date by Potomac
Edison,
PE Renaissance or the Issuer.
10
5. Representations
and Warranties of PE Renaissance.
PE Renaissance represents and warrants to the several Underwriters
that:
(a) At
the
time the Registration Statement initially became effective, at the time of
each
amendment thereto for the purposes of complying with Section 10(a)(3) of
the Act
(whether by post effective amendment, incorporated report or form of prospectus)
and on the Effective Date relating to the Bonds, the Registration Statement,
and
the Indenture, on the Closing Date, fully complied and will fully comply
in all
material respects with the applicable requirements of the Securities Act,
the
Trust Indenture Act and the applicable rules and regulations of the Commission
thereunder; the Registration Statement, at each of the aforementioned dates,
did
not and will not include any untrue statement of a material fact or omit
to
state any material fact required to be stated therein or necessary to make
the
statements therein, in the light of the circumstances in which they were
made,
not misleading. As of the Applicable Time and as of the Closing Date, the
Registration Statement and the Final Prospectus fully complied and will fully
comply in all material respects to the requirements of the Securities Act,
the
Trust Indenture Act and the applicable rules and regulations of the Commission
thereunder, and neither of such documents includes any untrue statement of
a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances in which they were made, not misleading; provided, that the
foregoing representations and warranties in this paragraph (a) shall not
apply
to statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Issuer or PE Renaissance by, or on
behalf of, any Underwriter through the Representatives expressly for use
in
connection with the preparation of the Registration Statement or the Final
Prospectus, or to any statements in or omissions from any Statement of
Eligibility on Form T 1, or amendments thereto, of the Indenture Trustee
filed
as exhibits to the Registration Statement or to any statements or omissions
made
in the Registration Statement or Final Prospectus relating to the DTC
Book-Entry-Only System that are based solely on information contained in
published reports of DTC.
(b) As
of its
date, at the Applicable Time, on the date of its filing, if applicable, and
on
the Closing Date, the Pricing Prospectus and each Issuer Free Writing Prospectus
(other than the Pricing Term Sheet), considered together, did not include
any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
in
which they were made, not misleading (except that (i) the principal amount
of the Bonds, the tranches, the initial principal balances, the scheduled
final
payment dates, the final maturity dates, the expected average lives, and
the
Expected Sinking Fund Schedule described in the Pricing Prospectus supersede
any
previously issued descriptions of such information and (ii) the interest
rate, price to the public and underwriting discounts and commissions for
each
tranche was not included in the Pricing Prospectus). The Pricing Term Sheet,
as
of its issue date and at all subsequent times through the completion of the
public offer and sale of the Bonds, considered together with the Pricing
Prospectus and each other Issuer Free Writing Prospectus, did not include
any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
in
which they were made, not misleading. The two preceding sentences do not
apply
to statements in or omissions from the Pricing Prospectus, the Pricing Term
Sheet or any Issuer Free Writing Prospectus in reliance upon and in conformity
with written information furnished to the Issuer or PE Renaissance by any
Underwriter through
11
the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information set forth in Schedule
IV
hereto.
PE Renaissance represents, warrants and agrees that it has treated and agrees
that it will treat each of the free writing prospectuses listed on Schedule
III
hereto
as an Issuer Free Writing Prospectus, and that each such Issuer Free Writing
Prospectus has fully complied and will fully comply with the applicable
requirements of Rule 164 and Rule 433, including timely Commission filing
where
required, legending and record keeping
(c) Each
Issuer Free Writing Prospectus, as of its issue date and at all subsequent
times
through the completion of the public offer and sale of the Bonds or until
any
earlier date that the Issuer or PE Renaissance notified or notifies the
Representatives as described in the next sentence, did not, does not and
will
not include any information that conflicted, conflicts or will conflict with
the
information then contained in the Registration Statement. If at any time
following issuance of an Issuer Free Writing Prospectus there occurred or
occurs
an event or development as a result of which such Issuer Free Writing Prospectus
conflicted or would conflict with the information then contained in the
Registration Statement or included or would include an untrue statement of
a
material fact or omitted or would omit to state a material fact necessary
in
order to make the statements therein, in the light of the circumstances
prevailing at that subsequent time, not misleading, (i) PE Renaissance or
the Issuer has promptly notified or will promptly notify the Representatives
and
(ii) PE Renaissance or the Issuer has promptly amended or will promptly
amend or supplement such Issuer Free Writing Prospectus to eliminate or correct
such conflict, untrue statement or omission. The foregoing two sentences
do not
apply to statements in or omissions from any Issuer Free Writing Prospectus
in
reliance upon and in conformity with written information furnished to the
Issuer
or PE Renaissance by any Underwriter through the Representatives specifically
for use therein, it being understood and agreed that the only such information
furnished by any Underwriter consists of the information set forth on
Schedule
IV
hereto.
(d) PE
Renaissance has been duly formed and is validly existing as a limited liability
company in good standing under the Limited Liability Company Act of the State
of
Delaware, as amended, with full limited liability company power and authority
to
execute, deliver and perform its obligations under this Underwriting Agreement,
the Transfer Agreement, the Sale Agreement, the PER Administration Agreement
and
the other agreements and instruments contemplated by the Pricing Prospectus
(collectively, the “PER
Documents”)
and to
own its properties and conduct its business as described in the Pricing
Prospectus; PE Renaissance has been duly qualified as a foreign limited
liability company for the transaction of business and is in good standing
under
the laws of each other jurisdiction in which it owns or leases properties
or
conducts any business so as to require such qualification, except where failure
to so qualify or to be in good standing would not have a material adverse
effect
on the business, properties or financial condition of the PE Renaissance;
PE
Renaissance has conducted and will conduct no business in the future that
would
be inconsistent with the description of the PE Renaissance’s business set forth
in the Pricing Prospectus; PE Renaissance is not a party to or bound by any
agreement or instrument other than the PER Documents and other agreements
or
instruments incidental to its formation; the Issuer has no material liabilities
or obligations other than those arising out of the transactions contemplated
by
the PER Documents and as described in the Pricing Prospectus; PE Renaissance
is
the beneficial owner of all of the limited liability company interests of
the
Issuer and such interests are owned free and clear of all liens,
12
encumbrances,
equities or claims; and based on current law, the Issuer is not classified
as an
association taxable as a corporation for United States federal income tax
purposes.
(e) The
Issuer is the only subsidiary of PE Renaissance.
(f) The
sale
by PE Renaissance of the Transferred Environmental Control Property to the
Issuer and the consummation of the transactions herein contemplated by PE
Renaissance, and the fulfillment of the terms hereof on the part of PE
Renaissance to be fulfilled, will not result in a breach of any of the terms
or
provisions of, or constitute a default under, PE Renaissance’s certificate of
formation or limited liability company agreement (the “PER
Charter Documents”),
or in
a material breach of any of the terms of, or constitute a material default
under, any indenture, mortgage, deed of trust or other agreement or instrument
to which PE Renaissance is now a party.
(g) This
Underwriting Agreement has been duly authorized, executed and delivered by
PE
Renaissance, which has the necessary limited liability company power and
authority to execute, deliver and perform its obligations under this
Underwriting Agreement, and constitutes a valid and binding obligation of
PE
Renaissance, enforceable against PE Renaissance in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar laws relating to
or
affecting creditors’ or secured parties’ rights generally and by general
principles of equity (including concepts of materiality, reasonableness,
good
faith and fair dealing), regardless of whether considered in a proceeding
in
equity or at law, and limitations on enforceability of rights to indemnification
or contribution by federal or state securities laws or regulations or by
public
policy.
(h) PE
Renaissance (i) is not in violation of the PER Charter Documents,
(ii) is not in default and no event has occurred which, with notice or
lapse of time or both, would constitute such a default, in the due performance
or observance of any term, covenant or condition contained in any indenture,
mortgage, deed of trust or other agreement or instrument to which it is a
party
or by which it is bound or to which any of its properties is subject, except
for
any such defaults that would not, individually or in the aggregate, have
a
material adverse effect on the business, property or financial condition
of PE
Renaissance and its subsidiaries considered as a whole, or (iii) is not in
violation of any law, ordinance, governmental rule, regulation or court decree
to which it or its property may be subject, except for any such violations
that
would not, individually or in the aggregate, have a material adverse effect
on
the business, property or financial condition of PE Renaissance and its
subsidiaries considered as a whole.
(i) Except
as
set forth or contemplated in the Pricing Prospectus, there is no litigation
or
governmental proceeding to which PE Renaissance or any of its subsidiaries
is a
party or to which any property of PE Renaissance or any of its subsidiaries
is
subject or which is pending or, to the knowledge of PE Renaissance, threatened
against PE Renaissance or any of its subsidiaries that would reasonably be
expected to, individually or in the aggregate, result in a material adverse
effect on the Issuer’s business, property, or financial condition or on PE
Renaissance’s ability to perform its obligations under the Transfer Agreement or
the Sale Agreement.
13
(j) Other
than any necessary action of the PSCWV, any filings required under the Statute
or Financing Order or as otherwise set forth or contemplated in the Pricing
Prospectus, no approval, authorization, consent or order of any public board
or
body (except such as have been already obtained and other than in connection
or
in compliance with the provisions of applicable blue-sky laws or securities
laws
of any state, as to which PE Renaissance makes no representations or
warranties), is legally required for the issuance and sale by the Issuer
of the
Bonds.
(k) PE
Renaissance is not, and after giving effect to the sale and issuance of the
Bonds, will not be, an “investment company” within the meaning of the 1940
Act.
(l) Each
of
the Transfer Agreement, the Sale Agreement and the PER Administration Agreement
has been duly and validly authorized by PE Renaissance, and when executed
and
delivered by PE Renaissance and the other parties thereto will constitute
a
valid and legally binding obligation of PE Renaissance, enforceable against
PE
Renaissance in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, receivership,
moratorium or other similar laws relating to or affecting creditors’ or secured
parties’ rights generally and by general principles of equity (including
concepts of materiality, reasonableness, good faith and fair dealing),
regardless of whether considered in a proceeding in equity or at law, and
limitations on enforceability of rights to indemnification by federal or
state
securities laws or regulations or by public policy.
(m) There
are
no West Virginia transfer taxes related to the transfer of the Transferred
Environmental Control Property or the issuance and sale of the Bonds to the
Underwriters pursuant to this Underwriting Agreement required to be paid
at or
prior to the Closing Date by PE Renaissance or the Issuer.
6. Investor
Communications.
(a) The
Issuer, PE Renaissance and Potomac Edison represent and agree that, unless
they
obtain the prior consent of the Representatives, and each Underwriter represents
and agrees that, unless it obtains the prior consent of the Issuer, PE
Renaissance and Potomac Edison and the Representatives, it has not made and
will
not make any offer relating to the Bonds that would constitute an Issuer
Free
Writing Prospectus, or that would otherwise constitute a “free writing
prospectus,” required to be filed by the Issuer, PE Renaissance or Potomac
Edison, as applicable, with the Commission or retained by the Issuer, PE
Renaissance or Potomac Edison, as applicable, under Rule 433; provided that
the
prior written consent of the parties hereto shall be deemed to have been
given
in respect of the Term Sheets and each other Free Writing Prospectus identified
in Schedule
III
hereto.
(b) Potomac
Edison, PE Renaissance and the Issuer (or the Representatives at the direction
of the Issuer) will prepare a final pricing term sheet relating to the Bonds
(the “Pricing
Term Sheet”),
containing only information that describes the final pricing terms of the
Bonds
and otherwise in a form consented to by the Representatives, and will file
such
final pricing term sheet within the period required by Rule 433(d)(5)(ii)
under
the Securities Act following the date such final terms have been established
for
all classes of the offering of the
14
Bonds.
The Pricing Term Sheet is an Issuer Free Writing Prospectus for purposes
of this
Agreement.
(c) Each
Underwriter may provide to investors one or more of the Free Writing
Prospectuses, including the Term Sheets, subject to the following
conditions:
(i) Unless
preceded or accompanied by a prospectus satisfying the requirements of Section
10(a) of the Securities Act, an Underwriter shall not convey or deliver any
Written Communication (as defined herein) to any person in connection with
the
initial offering of the Bonds, unless such Written Communication (i) is
made in reliance on Rule 134 under the Securities Act, (ii) constitutes a
prospectus satisfying the requirements of Rule 430A, (iii) is an Issuer
Free Writing Prospectus listed on Schedule
III
hereto
or (iv) is an Underwriter Free Writing Prospectus (as defined below).
“Written Communication” has the same meaning as that term is defined in Rule
405. An “Underwriter Free Writing Prospectus” means any free writing prospectus
that contains only preliminary or final terms of the Bonds and is not required
to be filed by Potomac Edison or the Issuer pursuant to Rule 433 and that
contains information substantially the same as the information contained
in the
Pricing Prospectus or Pricing Term Sheet (including, without limitation,
(i) the
class, size, rating, price, CUSIPs, coupon, yield, spread, benchmark, status
and/or legal maturity date of the Bonds, the weighted average life, expected
first and final payment dates, trade date, settlement date, transaction parties,
credit enhancement, roadshow details, ERISA eligibility, legal investment
status
and payment window of one or more classes of Bonds and (ii) a column or other
entry showing the status of the subscriptions for the Bonds, both for the
Bonds
as a whole and for each Underwriter’s retention, and/or expected pricing
parameters of the Bonds).
(ii) Each
Underwriter shall comply with all applicable laws and regulations in connection
with the use of Free Writing Prospectuses and Term Sheets, including but
not
limited to Rule 164 and Rule 433.
(iii) All
Free
Writing Prospectuses provided to investors, whether or not filed with the
Commission, shall bear a legend including substantially the following
statement:
The
Issuers have filed registration statements (including prospectuses)
(Registration Nos. 333-139820 and 333-139937, respectively) with the SEC
for the
offerings to which this communication relates. Before you invest, you should
read the prospectus in those registration statements and other documents
the
Issuers have filed with the SEC for more complete information about the
Issuers
and these offerings. You may get these documents for free by visiting XXXXX
on
the SEC website at xxx.xxx.xxx. Alternatively, the Issuers, any underwriter
or
any dealer participating in the offerings will arrange to send you the
prospectus if you request it by calling toll free at 1 (800)
15
762-1860
(First Albany Capital) or 1 (888) 294-8898 (Loop Capital Markets,
LLC).
The
Issuer and the Representatives shall have the right to require additional
specific legends or notations to appear on any Free Writing Prospectus, the
right to require changes regarding the use of terminology and the right to
determine the types of information appearing therein with the approval of,
in
the case of the Issuer, Representatives and, in the case of the Representatives,
the Issuer (which in either case shall not be unreasonably
withheld).
(iv) Each
Underwriter covenants with the Issuer, Potomac Edison and PE Renaissance
that
after the Final Prospectus is available such Underwriter shall not distribute
any written information concerning the Bonds to an investor unless such
information is preceded or accompanied by the Final Prospectus or by notice
to
the investor that the Final Prospectus is available for free by visiting
XXXXX
on the SEC website at xxx.xxx.xxx.
(v) Each
Underwriter agrees and covenants that (a) no information that is conveyed
to investors has been or will be inconsistent with the information contained
in
the Registration Statement, the Pricing Prospectus and each Issuer Free Writing
Prospectus, and (b) if an Underwriter shall use an Underwriter Free Writing
Prospectus, the liability arising from its use shall be the sole responsibility
of the Underwriter using such Underwriter Free Writing Prospectus unless
the
Underwriter Free Writing Prospectus was consented to in advance by Potomac
Edison, PE Renaissance and the Issuer; provided, however, that, for the
avoidance of doubt, (i) this clause (v) shall not be interpreted as
tantamount to the indemnification obligations contained in Section 12(b)
hereof
and (ii) no Underwriter shall be responsible for any “issuer information”
as defined in Rule 433(h)(2) under the Securities Act giving rise to such
Underwriter liability provided by the Issuer, PE Renaissance or Potomac Edison
for inclusion in the Registration Statement, the Pricing Prospectus or any
Issuer Free Writing Prospectus or was otherwise previously provided by the
Issuer, PE Renaissance or Potomac Edison to such Underwriter for use in such
Underwriter Free Writing Prospectus.
7. Purchase
and Sale.
On the basis of the representations and warranties herein contained, and
subject
to the terms and conditions herein set forth, the Issuer shall sell to each
of
the Underwriters, and each Underwriter shall purchase from the Issuer, at
the
time and place herein specified, severally and not jointly, at the purchase
price set forth in Schedule
I
hereto,
the principal amount of the Bonds set forth opposite such Underwriter’s name in
Schedule
II
hereto.
The Underwriters agree to make a public offering of the Bonds. The Issuer
shall
pay (in the form of a discount to the principal amount of the offered Bonds)
to
the Underwriters a commission equal to $496,513.
8. Time
and Place of Closing.
Delivery of the Bonds against payment of the aggregate purchase price therefor
by wire transfer in federal funds shall be made at the place, on the date
and at
the time specified in Schedule
I
hereto,
or at such other place, time and date as shall be agreed upon in writing
by the
Issuer and the Representatives. The hour and date of such delivery and payment
are herein called the “Closing
Date.”
The
Bonds shall be delivered to
16
DTC
or to
U.S. Bank National Association, as custodian for DTC, in fully registered
global
form registered in the name of Cede & Co., for the respective accounts
specified by the Representatives not later than the close of business on
the
business day preceding the Closing Date or such other time as may be agreed
upon
by the Representatives. The Issuer agrees to make the Bonds available to
the
Representatives for checking purposes not later than 3:00 P.M. New York Time
on
the last business day preceding the Closing Date at the place specified for
delivery of the Bonds in Schedule
I
hereto,
or at such other place as the Issuer may specify.
If
any
Underwriter shall fail or refuse to purchase and pay for the aggregate principal
amount of Bonds that such Underwriter has agreed to purchase and pay for
hereunder, the Issuer shall immediately give notice to the other Underwriters
of
the default of such Underwriter, and the other Underwriters shall have the
right
within 24 hours after the receipt of such notice to determine to purchase,
or to
procure one or more others, who are members of the National Association of
Securities Dealers, Inc. (“NASD”)
(or,
if not members of the NASD, who are not eligible for membership in the NASD
and
who agree (i) to make no sales within the United States, its territories or
its possessions or to persons who are citizens thereof or residents therein
and
(ii) in making sales to comply with the NASD’s Conduct Rules) and
satisfactory to the Issuer, to purchase, upon the terms herein set forth,
the
aggregate principal amount of Bonds that the defaulting Underwriter had agreed
to purchase. If any non-defaulting Underwriter or Underwriters shall determine
to exercise such right, such Underwriter or Underwriters shall give written
notice to the Issuer of the determination in that regard within 24 hours
after
receipt of notice of any such default, and thereupon the Closing Date shall
be
postponed for such period, not exceeding three business days, as the Issuer
shall determine. If in the event of such a default no non-defaulting Underwriter
shall give such notice, then this Underwriting Agreement may be terminated
by
the Issuer, upon like notice given to the non-defaulting Underwriters, within
a
further period of 24 hours. If in such case the Issuer shall not elect to
terminate this Underwriting Agreement it shall have the right, irrespective
of
such default:
(a) to
require each non-defaulting Underwriter to purchase and pay for the respective
aggregate principal amount of Bonds that it had agreed to purchase hereunder
as
hereinabove provided and, in addition, the aggregate principal amount of
Bonds
that the defaulting Underwriter shall have so failed to purchase up to aggregate
principal amount of Bonds equal to one tenth (1/10) of the aggregate principal
amount of Bonds that such non-defaulting Underwriter has otherwise agreed
to
purchase hereunder, and/or
(b) to
procure one or more persons, reasonably acceptable to the Representatives,
who
are members of the NASD (or, if not members of the NASD, who are not eligible
for membership in the NASD and who agree (i) to make no sales within the
United States, its territories or its possessions or to persons who are citizens
thereof or residents therein and (ii) in making sales to comply with the
NASD’s Conduct Rules), to purchase, upon the terms herein set forth, either all
or a part of the aggregate principal amount of Bonds that such defaulting
Underwriter had agreed to purchase or that portion thereof that the remaining
Underwriters shall not be obligated to purchase pursuant to the foregoing
clause
(a).
In
the event the Issuer shall exercise its rights
under (a) and/or (b) above, the Issuer shall give written notice thereof
to the
non-defaulting Underwriters within such further
17
period
of
24 hours, and thereupon the Closing Date shall be postponed for such period,
not
exceeding three business days, as the Issuer shall determine.
In
the
computation of any period of 24 hours referred to in this Section 8, there
shall
be excluded a period of 24 hours in respect of each Saturday, Sunday or legal
holiday that would otherwise be included in such period of time.
Any
action taken by the Issuer under this Section 8 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter
under
this Underwriting Agreement. Termination by the Issuer under this Section
8
shall be without any liability on the part of the Issuer, Potomac Edison,
PE
Renaissance or any non-defaulting Underwriter, except as otherwise provided
in
Sections 9(a)(viii) and 12 hereof.
9. Covenants.
(a) Covenants
of the Issuer.
The Issuer covenants and agrees with the several Underwriters that:
(i) The
Issuer will upon request promptly deliver to the Representatives and Counsel
to
the Underwriters a signed copy of the Registration Statement as originally
filed
or, to the extent a signed copy is not available, a conformed copy, certified
by
an officer of the Issuer to be in the form as originally filed, including
all
amendments thereto.
(ii) The
Issuer will deliver to the Underwriters, as soon as practicable after the
date
hereof, as many copies of the Pricing Prospectus and the Final Prospectus
as
they may reasonably request.
(iii) The
Issuer will cause the Final Prospectus to be filed with the Commission pursuant
to Rule 424 under the Securities Act (“Rule
424”)
as
soon as practicable and advise the Underwriters of any stop order suspending
the
effectiveness of the Registration Statement or the institution of any proceeding
therefor of which Issuer shall have received notice. The Issuer will use
its
reasonable best efforts to prevent the issuance of any such stop order and,
if
issued, to obtain as soon as possible the withdrawal thereof. The Issuer
has
complied and will comply with Rule 433 in connection with the offering of
the
Bonds.
(iv) As
soon
as practicable, but not later than 12 months after the date hereof, the Issuer
will make generally available to its security holders, an earnings statement
(which need not be audited) that will satisfy the provisions of Section 11(a)
of
the Securities Act with respect to the Bonds.
(v) The
Issuer will furnish such proper information as may be lawfully required and
otherwise cooperate in qualifying the Bonds for offer and sale under the
blue-sky laws of such jurisdictions as the Representatives may designate;
provided that neither the Issuer, Potomac Edison nor PE Renaissance shall
be
required to qualify as a foreign limited liability company or dealer in
securities, to file any consents to service of
18
process
under the laws of any jurisdiction, or meet any other requirements deemed
by the
Issuer, Potomac Edison or PE Renaissance, as applicable, to be unduly
burdensome.
(vi) The
Issuer will not file any amendment to the Registration Statement or amendment
or
supplement to the Final Prospectus during the period when a prospectus relating
to the Bonds is required to be delivered under the Securities Act, without
prior
notice to the Underwriters, or to which Xxx Xxxxxx LLP, who are acting as
counsel for the Underwriters (“Counsel
for the Underwriters”),
shall
reasonably object by written notice to Potomac Edison and the
Issuer.
(vii) If,
during such period of time (not exceeding nine months) after the Final
Prospectus has been filed with the Commission pursuant to Rule 424 as in
the
opinion of Counsel for the Underwriters a prospectus covering the Bonds is
required by law to be delivered in connection with sales by an Underwriter
or
dealer (including in circumstances where such requirement may be satisfied
pursuant to Rule 172 under the Securities Act (“Rule
172”)),
any
event relating to or affecting the Issuer, the Bonds or the Transferred
Environmental Control Property or of which the Issuer shall be advised in
writing by the Representatives shall occur that in the Issuer’s reasonable
judgment after consultation with Counsel for the Underwriters should be set
forth in a supplement to, or an amendment of, the Final Prospectus in order
to
make the Final Prospectus not misleading in the light of the circumstances
when
it is delivered to a purchaser (including in circumstances where such
requirement may be satisfied pursuant to Rule 172), the Issuer will, at its
expense, amend or supplement the Final Prospectus by either (A) preparing
and furnishing to the Underwriters at the Issuer’s expense a reasonable number
of copies of a supplement or supplements or an amendment or amendments to
the
Final Prospectus or (B) making an appropriate filing pursuant to Section 13
or Section 15 of the Exchange Act, which will supplement or amend the Final
Prospectus so that, as supplemented or amended, it will not contain any untrue
statement of a material fact or omit to state any material fact necessary
in
order to make the statements therein, in the light of the circumstances when
the
Final Prospectus is delivered to a purchaser (including in circumstances
where
such requirement may be satisfied pursuant to Rule 172), not misleading;
provided that should such event relate solely to the activities of any of
the
Underwriters, then such Underwriters shall assume the expense of preparing
and
furnishing any such amendment or supplement.
(viii) The
Issuer will, except as herein provided, pay or cause to be paid all expenses
and
taxes (except transfer taxes) in connection with (i) the preparation and
filing by it of the Registration Statement, Pricing Prospectus and Final
Prospectus, (ii) the issuance and delivery of the Bonds as provided in Section
8
hereof (including, without limitation, reasonable fees and disbursements
of
Counsel for the Underwriters and all trustee, rating agency and PSCWV financial
advisor fees), (iii) the qualification of the Bonds under blue-sky laws,
(iv) the printing and delivery to the Underwriters of reasonable quantities
of the Registration Statement, the Pricing Prospectus and Final Prospectus
and
(v) any amendment or supplement to the Registration Statement, Pricing
Prospectus, or Issuer Free Writing Prospectus required to be filed with the
Commission to correct any untrue statement of a material fact or omission
of any
statement necessary to make the statements therein, in the light of the
circumstances in which they were made,
19
not
misleading, the result of which requires the reforming of any contracts of
sale
of the Bonds made by the Underwriters (including any damages or other amounts
payable in connection with legal and contractual liability). If this
Underwriting Agreement shall be terminated in accordance with the provisions
of
Section 11 or 13 hereof, the Issuer shall not be required to pay any amount
for
any expenses of the Underwriters or for any fees and expenses of counsel
for the
PSCWV financial advisor, except that the Issuer will reimburse the Underwriters
for their reasonable out-of-pocket expenses, in an aggregate amount not
exceeding $100,000, incurred in contemplation of the performance of this
Underwriting Agreement and will reimburse the Underwriters for the reasonable
fees and disbursements of Counsel for the Underwriters. The Issuer shall
not in
any event be liable to any of the several Underwriters for damages on account
of
loss of anticipated profits.
(ix) During
the period from the date of this Underwriting Agreement to the date that
is five
days after the Closing Date, the Issuer will not, without the prior written
consent of the Representatives, offer, sell or contract to sell, or otherwise
dispose of, directly or indirectly, or announce the offering of, any
asset-backed securities (other than the Bonds).
(x) To
the
extent, if any, that any rating necessary to satisfy the condition set forth
in
Section 10(z) of this Underwriting Agreement is conditioned upon the furnishing
of documents or the taking of other actions by the Issuer on or after the
Closing Date, the Issuer shall furnish such documents and take such other
actions.
(xi) For
a
period from the date of this Underwriting Agreement until the retirement
of the
Bonds or until such time as the Underwriters shall cease to maintain a secondary
market in the Bonds, whichever occurs first, the Issuer shall, to the extent
permitted by and consistent with the Issuer’s obligations under applicable law,
make available on the website associated with the Issuer’s parent, such periodic
reports, if any, as are required from time to time under Section 13 or Section
15(d) of the Exchange Act. The Issuer shall also, to the extent permitted
by and
consistent with the Issuer’s obligations under applicable law, include in the
periodic and other reports to be filed with the Commission as provided above,
such information as required by Section 3.07(e) of the Indenture with respect
to
the Bonds. To the extent that the Issuer’s obligations are terminated or limited
by an amendment to Section 3.07(e) of the Indenture, or otherwise, such
obligations shall be correspondingly terminated or limited
hereunder.
(xii) During
a
period of one year from the effective date of the Registration Statement,
to
furnish to the Representatives (A) as soon as they are available, copies
of any
reports and financial statements of the Issuer furnished to or filed with
the
Commission, other than such reports and financial statements that are publicly
available on the Commission’s XXXXX system; and (B) such additional information
concerning the business and financial condition of the Issuer as the
Representatives may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Issuer are consolidated in reports furnished to its shareholders generally
or to
the Commission).
20
(xiii) The
Issuer will file with the Commission such information on Form 10-D or Form
10-K
as may be required by Rule 463 under the Securities Act.
(xiv) If
the
Issuer elects to rely upon Rule 462(b) under the Securities Act (“Rule
462(b)”),
the
Issuer shall file a Rule 462(b) Registration Statement with the Commission
in
compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the
date of
this Agreement, and the Issuer shall at the time of filing either pay to
the
Commission the filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Securities Act.
(b) Covenants
of Potomac Edison.
Potomac Edison covenants and agrees with the several Underwriters that, to
the
extent that the Issuer has not already performed such act pursuant to Section
9(a):
(i) To
the
extent permitted by applicable law and the agreements and instruments that
bind
Potomac Edison, Potomac Edison will use its reasonable best efforts to cause
the
Issuer to comply with the covenants set forth in Section 9(a)
hereof.
(ii) Potomac
Edison will use its reasonable best efforts to prevent the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement and, if issued, to obtain as soon as possible the withdrawal
thereof.
(iii) If,
during such period of time (not exceeding nine months) after the Final
Prospectus has been filed with the Commission pursuant to Rule 424 as in
the
opinion of Counsel for the Underwriters a prospectus covering the Bonds is
required by law to be delivered in connection with sales by an Underwriter
or
dealer, any event relating to or affecting Potomac Edison, the Bonds or the
Transferred Environmental Control Property or of which Potomac Edison shall
be
advised in writing by the Representatives shall occur that in Potomac Edison’s
reasonable judgment after consultation with Counsel for the Underwriters
should
be set forth in a supplement to, or an amendment of, the Final Prospectus
in
order to make the Final Prospectus not misleading in the light of the
circumstances when it is delivered to a purchaser, Potomac Edison will cause
the
Issuer, at Potomac Edison’s or the Issuer’s expense, to amend or supplement the
Final Prospectus by either (A) preparing and furnishing to the Underwriters
at
Potomac Edison’s or the Issuer’s expense a reasonable number of copies of a
supplement or supplements or an amendment or amendments to the Final Prospectus
or (B) causing the Issuer to make an appropriate filing pursuant to Section
13
or Section 15 of the Exchange Act, which will supplement or amend the Final
Prospectus so that, as supplemented or amended, it will not contain any untrue
statement of a material fact or omit to state any material fact necessary
in
order to make the statements therein, in the light of the circumstances when
the
Final Prospectus is delivered to a purchaser, not misleading; provided that
should such event relate solely to the activities of any of the Underwriters,
then such Underwriters shall assume the expense of preparing and furnishing
any
such amendment or supplement.
21
(iv) During
the period from the date of this Underwriting Agreement to the date that
is five
days after the Closing Date, Potomac Edison will not, without the prior written
consent of the Representatives, offer, sell or contract to sell, or otherwise
dispose of, directly or indirectly, or announce the offering of, any
asset-backed securities (other than the Bonds).
(v) Potomac
Edison will cause the proceeds for the issuance and sale of the Bonds to
be
applied for the purposes described in the Pricing Prospectus.
(vi) To
the
extent, if any, that any rating necessary to satisfy the condition set forth
in
Section 10(z) of this Underwriting Agreement is conditioned upon the furnishing
of documents or the taking of other actions by Potomac Edison on or after
the
Closing Date, Potomac Edison shall furnish such documents and take such other
actions.
(c) Covenants
of PE Renaissance.
PE Renaissance covenants and agrees with the several Underwriters that, to
the
extent that the Issuer has not already performed such act pursuant to Section
9(a):
(i) To
the
extent permitted by applicable law and the agreements and instruments that
bind
PE Renaissance, PE Renaissance will use its reasonable best efforts to cause
the
Issuer to comply with the covenants set forth in Section 9(a)
hereof.
(ii) PE
Renaissance will use its reasonable best efforts to prevent the issuance
by the
Commission of any stop order suspending the effectiveness of the Registration
Statement and, if issued, to obtain as soon as possible the withdrawal
thereof.
(iii) If,
during such period of time (not exceeding nine months) after the Final
Prospectus has been filed with the Commission pursuant to Rule 424 as in
the
opinion of Counsel for the Underwriters a prospectus covering the Bonds is
required by law to be delivered in connection with sales by an Underwriter
or
dealer, any event relating to or affecting PE Renaissance, the Bonds or the
Transferred Environmental Control Property or of which PE Renaissance shall
be
advised in writing by the Representatives shall occur that in PE Renaissance’s
reasonable judgment after consultation with Counsel for the Underwriters
should
be set forth in a supplement to, or an amendment of, the Final Prospectus
in
order to make the Final Prospectus not misleading in the light of the
circumstances when it is delivered to a purchaser, PE Renaissance will cause
the
Issuer, at PE Renaissance’s or the Issuer’s expense, to amend or supplement the
Final Prospectus by either (A) preparing and furnishing to the Underwriters
at
PE Renaissance’s or the Issuer’s expense a reasonable number of copies of a
supplement or supplements or an amendment or amendments to the Final Prospectus
or (B) causing the Issuer to make an appropriate filing pursuant to Section
13
or Section 15 of the Exchange Act, which will supplement or amend the Final
Prospectus so that, as supplemented or amended, it will not contain any untrue
statement of a material fact or omit to state any material fact necessary
in
order to make the statements therein, in the light of the circumstances when
the
Final Prospectus is delivered to a purchaser, not
22
misleading;
provided that should such event relate solely to the activities of any of
the
Underwriters, then such Underwriters shall assume the expense of preparing
and
furnishing any such amendment or supplement.
(iv) During
the period from the date of this Underwriting Agreement to the date that
is five
days after the Closing Date, PE Renaissance will not, without the prior written
consent of the Representatives, offer, sell or contract to sell, or otherwise
dispose of, directly or indirectly, or announce the offering of, any
asset-backed securities (other than the Bonds).
(v) PE
Renaissance will cause the proceeds for the issuance and sale of the Bonds
to be
applied for the purposes described in the Pricing Prospectus.
(vi) To
the
extent, if any, that any rating necessary to satisfy the condition set forth
in
Section 10(z) of this Underwriting Agreement is conditioned upon the furnishing
of documents or the taking of other actions by PE Renaissance on or after
the
Closing Date, PE Renaissance shall furnish such documents and take such other
actions.
10. Conditions
to the Obligations of the Underwriters.
The obligations of the Underwriters to purchase the Bonds shall be subject
to
the accuracy of the representations and warranties on the part of the Issuer,
PE
Renaissance and Potomac Edison contained in this Underwriting Agreement,
on the
part of Potomac Edison contained in Article III of the Transfer Agreement,
on
the part of PE Renaissance contained in Article III of the Sale Agreement,
and
on the part of Potomac Edison contained in Section 5.01 of the Servicing
Agreement as of the Closing Date, to the accuracy of the statements of the
Issuer, PE Renaissance and Potomac Edison made in any certificates pursuant
to
the provisions hereof, to the performance by the Issuer, PE Renaissance and
Potomac Edison of their obligations hereunder, and to the following additional
conditions:
(a) The
Final
Prospectus shall have been filed with the Commission pursuant to Rule 424
prior
to 5:30 P.M., New York time, on the second business day after the date of
this
Underwriting Agreement. In addition, all material required to be filed by
the
Issuer or Potomac Edison pursuant to Rule 433(d) under the Securities Act
that
was prepared by either of them or that was prepared by any Underwriter and
timely provided to the Issuer or Potomac Edison shall have been filed with
the
Commission within the applicable time period prescribed for such filing by
such
Rule 433(d).
(b) No
stop
order suspending the effectiveness of the Registration Statement shall be
in
effect, and no proceedings for that purpose shall be pending before, or
threatened by, the Commission on the Closing Date; and the Underwriters shall
have received one or more certificates, dated the Closing Date and signed
by an
officer of Potomac Edison and the Issuer, as appropriate, to the effect that
no
such stop order is in effect and that no proceedings for such purpose
are pending before, or to the knowledge of Potomac Edison or the Issuer,
as the
case may be, threatened by, the Commission.
23
(c) The
Issuer shall have complied with the provisions of Section 9(a)(ii) hereof
with
respect to the furnishing of prospectuses.
(d) Xxx
Xxxxxx LLP, Counsel for the Underwriters, shall have furnished to the
Representatives their written opinion or opinions, dated the Closing Date,
in a
form or forms acceptable to the Representatives, and such counsel shall have
received such papers and information as they may reasonably request to enable
them to render such opinion or opinions.
(e) Xxxxxxxx,
Xxxxxx & Finger, P.A., special Delaware counsel for Potomac Edison and the
Issuer, shall have furnished to the Representatives their written opinion,
dated
the Closing Date and in form and substance reasonably acceptable to the
Representatives, addressing the matters set forth in Exhibit
10(e)
and such
other matters as the Representatives may reasonably request.
(f) Xxxxxxxx,
Xxxxxx & Finger, P.A., special Delaware counsel for Potomac Edison and the
Issuer, shall have furnished to the Representatives their written opinion,
dated
the Closing Date and in form and substance reasonably acceptable to the
Representatives, addressing the matters set forth in Exhibit
10(f)
and such
other matters as the Representatives may reasonably request.
(g) Xxxxxx
Xxxx Xxxxx Raysman & Xxxxxxx LLP, counsel for the Issuer, PE Renaissance and
Potomac Edison, shall
have furnished to the Representatives their written opinion, dated the Closing
Date and in form and substance reasonably acceptable to the Representatives,
addressing the matters set forth in Exhibit
10(g)
and such
other matters as the Representatives may reasonably request.
(h) DLA
Piper
US LLP, Xxxxxxx Xxxxx PLLC, and Xxxxxx X. Xxxx, Esq., Assistant General Counsel
of Allegheny Energy, Inc., each counsel for the Issuer, PE
Renaissance and Potomac Edison, shall
have furnished to the Representatives their written opinions, dated the Closing
Date and in form and substance reasonably acceptable to the Representatives,
addressing the matters set forth in Exhibit
10(h)(i),
Exhibit
10(h)(ii),
and
Exhibit
10(h)(iii),
respectively, and such other matters as the Representatives may
reasonably request.
(i) Xxxxxx
Xxxx Xxxxx Raysman & Xxxxxxx LLP, counsel for the Issuer, PE Renaissance and
Potomac Edison, shall have furnished to the Representatives their written
opinion, dated
the
Closing Date and in form and substance reasonably acceptable to the
Representatives, addressing the matters set forth in Exhibit
10(i)
and such
other matters as the Representatives may reasonably request.
(j) Xxxxxx
Xxxx Xxxxx Raysman & Xxxxxxx LLP, counsel for the Issuer, PE Renaissance and
Potomac Edison, shall have furnished to the Representatives their written
opinion, dated the Closing Date and in form and substance reasonably acceptable
to the Representatives, addressing the matters set forth in Exhibit
10(j)
and such
other matters as the Representatives may reasonably request.
(k) Xxxxxxx
Xxxxx PLLC, counsel for the Issuer, PE Renaissance and Potomac Edison, shall
have furnished to the Representatives their written opinion, dated the Closing
Date
24
and
in
form and substance reasonably acceptable to the Representatives, addressing
the
matters set forth in Exhibit
10(k)
and such
other matters as the Representatives may reasonably request.
(l) Xxxxxx
Xxxx Xxxxx Raysman & Xxxxxxx LLP, counsel for the Issuer, PE Renaissance and
Potomac Edison, shall have furnished to the Representatives their written
opinion, dated the Closing Date and in form and substance reasonably acceptable
to the Representatives, addressing the matters set forth in Exhibit
10(l)
and such
other matters as the Representatives may reasonably request.
(m)
Xxxxxx
Xxxx Xxxxx Raysman & Xxxxxxx LLP, counsel for the Issuer, PE Renaissance and
Potomac Edison, shall
have furnished to the Representatives their written opinion, dated the Closing
Date and in form and substance reasonably acceptable to the Representatives,
addressing the matters set forth in Exhibit
10(m)
and such
other matters as the Representatives may reasonably request.
(n)
Xxxxxxx Xxxxx PLLC,
counsel
for the Issuer, PE Renaissance and Potomac Edison, shall have furnished to
the
Representatives their written opinion, dated the Closing Date and in form
and
substance reasonably acceptable to the Representatives, addressing the matters
set forth in Exhibit
10(n)
and such
other matters as the Representatives may reasonably request.
(o) Xxxxxx
Xxxx Xxxxx Raysman & Xxxxxxx LLP, counsel for the Issuer, PE Renaissance and
Potomac Edison, shall have furnished to the Representatives their written
opinion, dated the Closing Date and in form and substance reasonably acceptable
to the Representatives, addressing the matters set forth in Exhibit
10(o)
and such
other matters as the Representatives may reasonably request.
(p)
Xxxxxx
&
Xxxxxxx LLP,
counsel
for the Indenture Trustee, shall
have furnished to the Representatives their written opinion, dated the Closing
Date and in form and substance reasonably acceptable to the Representatives,
addressing the matters set forth in Exhibit
10(p)
and such
other matters as the Representatives may reasonably request.
(q)
Xxxxxxx Xxxxx PLLC,
counsel
for the
Issuer, PE Renaissance and Potomac Edison, shall have furnished to the
Representatives their written opinion, dated the Closing Date and in form
and
substance reasonably acceptable to the Representatives, addressing the matters
set forth in Exhibit
10(q)
and such
other matters as the Representatives may reasonably request.
(r) Xxxxxxx
Xxxxx PLLC, counsel for the
Issuer, PE Renaissance and Potomac Edison, shall have furnished to the
Representatives their written opinion, dated the Closing Date and in form
and
substance reasonably acceptable to the Representatives, addressing the matters
set forth in Exhibit
10(r)
and such
other matters as the Representatives may reasonably request.
(s) Xxxxxx
Xxxx Xxxxx Raysman & Xxxxxxx LLP, counsel for the Issuer, PE Renaissance and
Potomac Edison, shall have furnished to the Representatives their written
opinion, dated the Closing Date and in form and substance reasonably acceptable
to the Representatives, addressing the matters set forth in Exhibit
10(s)
and such
other matters as the Representatives may reasonably request.
25
(t) Xxxxxxxx,
Xxxxxx & Finger, P.A., special Delaware counsel for the Issuer, PE
Renaissance and Potomac Edison, shall have furnished to the Representatives
their written opinion, dated the Closing Date and in form and substance
reasonably acceptable to the Representatives, addressing the matters set
forth
in Exhibit
10(t)
and such
other matters as the Representatives may reasonably request.
(u) Xxxxxxx
Xxxxx PLLC, counsel for the Issuer, PE Renaissance and Potomac Edison, shall
have furnished to the Representatives their written opinion, dated the Closing
Date and in form and substance reasonably acceptable to the Representatives,
addressing the matters set forth in Exhibit
10(u)
and such
other matters as the Representatives may reasonably request.
(v) Xxxxxx
Xxxx Xxxxx Raysman & Xxxxxxx LLP, counsel for the Issuer, PE Renaissance and
Potomac Edison, shall have furnished to the Representatives their written
opinion, dated the Closing Date and in form and substance reasonably acceptable
to the Representatives, addressing the matters set forth in Exhibit
10(v)
and such
other matters as the Representatives may reasonably request.
(w)
Xxxxxx
Xxxx Xxxxx Raysman & Xxxxxxx LLP, counsel for the Issuer, PE Renaissance and
Potomac Edison, shall have furnished to the Representatives their written
opinion, dated the Closing Date and in form and substance reasonably acceptable
to the Representatives, addressing the matters set forth in Exhibit
10(w)
and such
other matters as the Representatives may reasonably request.
(x) Pricewaterhouse
Coopers LLP shall have furnished to the Representatives on the date hereof
and
on the Closing Date, letters, the first dated the date hereof and the second
dated the Closing Date, each in form and substance satisfactory to the
Representatives, containing statements and information of the type ordinarily
included in accountants’ “comfort letters” to underwriters with respect to
certain financial, accounting, and statistical information contained in the
Pricing Prospectus and the Final Prospectus.
(y) Subsequent
to the respective dates as of which information is given in each of the
Registration Statement, the Pricing Prospectus and the Final Prospectus,
there
shall not have been any change specified in the certificates required by
subsection (cc)
of this
Section 10
which
is, in the judgment of the Representatives, so material and adverse as to
make
it impracticable or inadvisable to proceed with the offering or the delivery
of
the Bonds as contemplated by the Registration Statement and the Final
Prospectus.
(z) The
Issuer LLC Agreement, the PER LLC Agreement, the Issuer Administration
Agreement, the PER Administration Agreement, the Transfer Agreement, the
Sale
Agreement, the Servicing Agreement and the Indenture and any amendment or
supplement to any of the foregoing shall have been executed and
delivered.
(aa)
Since
the
respective dates as of which information is given in each of the Registration
Statement and in the Pricing Prospectus and as of the Closing Date there
shall
have been no (i) material adverse change in the business, property or
financial condition of Potomac Edison and its subsidiaries, taken as a whole,
or
the Issuer or (ii) adverse development concerning the business or assets of
Potomac Edison and its subsidiaries, taken as a whole, or the
26
Issuer
which would be reasonably likely to result in a material adverse change in
the
prospective business, property or financial condition of Potomac Edison and
its
subsidiaries, taken as a whole, whether or not in the ordinary course of
business, or the Issuer or (iii) development which would be reasonably
likely to result in a material adverse change in the Transferred Environmental
Control Property, the Bonds or the Financing Order.
(bb)
At
the
Closing Date, (i) the Bonds shall be rated at least “Aaa”, “AAA”, and “AAA”
by Xxxxx’x Investors Service, Inc. (“Moody’s”),
Standard & Poor’s, a division of the XxXxxx-Xxxx Companies, Inc.
(“S&P”)
and
Fitch, Inc. (“Fitch”),
respectively, and the Issuer shall have delivered to the Underwriters a letter
from each such rating agency, or other evidence satisfactory to the
Underwriters, confirming that the Bonds have such ratings, and (ii) neither
Moody’s, S&P nor Fitch shall have, since the date of this Underwriting
Agreement, downgraded or publicly announced that it has under surveillance
or
review, with possible negative implications, its ratings of the
Bonds.
(cc) The
Issuer, PE Renaissance and Potomac Edison shall have furnished or caused
to be
furnished to the Representatives at the Closing Date certificates of officers
of
Potomac Edison, PE Renaissance and the Issuer, as the case may be, reasonably
satisfactory to the Representatives, as to the accuracy of the representations
and warranties of Potomac Edison, PE Renaissance and the Issuer, in the Transfer
Agreement, the Sale Agreement, Servicing Agreement and the Indenture at and
as
of the Closing Date, as to the performance by the Issuer, PE Renaissance
and
Potomac Edison of all of their obligations hereunder to be performed at or
prior
to such Closing Date, as to the matters set forth in subsections (b)
and
(aa)
of this
Section 10
and as
to such other matters as the Representatives may reasonably
request.
(dd) An
issuance advice letter, in a form consistent with the provisions of the
Financing Order, shall have been filed with the PSCWV and shall have become
effective.
(ee) On
or
prior to the Closing Date, the Issuer shall have delivered to the
Representatives evidence, in form and substance reasonably satisfactory to
the
Representatives, that appropriate filings have been or are being made in
accordance with the Statute, the Financing Order and other applicable law
reflecting the grant of a security interest by the Issuer in the collateral
relating to the Bonds to the Indenture Trustee, including the filing of the
requisite notices in the office of the Secretary of State of the State of
West
Virginia.
(ff) On
or
prior to the Closing Date, PE Renaissance shall have funded the capital
subaccount of the Issuer with cash in an amount equal to $574,125.
(gg)
The
Issuer, PE Renaissance and Potomac Edison shall have furnished or caused
to be
furnished or agree to furnish to the Rating Agencies at the Closing Date
such
opinions and certificates as the Rating Agencies shall have reasonably requested
prior to such Closing Date.
11. Conditions
of Issuer’s Obligations.
The obligation of the Issuer to deliver the Bonds shall be subject to the
conditions that no stop order suspending the effectiveness of the Registration
Statement shall be in effect at the Closing Date and no proceeding for that
purpose shall be pending before, or threatened by, the Commission at the
Closing
Date and the issuance
27
advice
letter described in Section 10(dd)
shall
have become effective. In case these conditions shall not have been fulfilled,
this Underwriting Agreement may be terminated by the Issuer 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 9(a)(viii)
and
12 hereof.
12. Indemnification
and Contribution.
(a) Potomac
Edison, PE Renaissance and the Issuer, jointly and severally, shall indemnify,
defend and hold harmless each Underwriter, each Underwriter’s members, managers,
employees, agents, officers and directors and each person who controls any
Underwriter within the meaning of Section 15 of the Securities Act from and
against any and all losses, claims, damages or liabilities, joint or several,
to
which they or any of them may become subject under the Securities Act or
any
other statute or common law and shall reimburse each such Underwriter and
person
for any reasonable legal or other expenses (including, to the extent hereinafter
provided, reasonable counsel fees) as and when incurred by them in connection
with investigating any such losses, claims, damages or liabilities or in
connection with defending any actions, insofar as such losses, claims, damages,
liabilities, expenses or actions arise out of or are based upon (i) any
untrue statement or alleged untrue statement of a material fact contained
in the
Registration Statement or any omission or alleged omission to state therein
a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) any untrue statement or alleged untrue
statement of a material fact contained in the Pricing Prospectus, the Final
Prospectus and, together with the Pricing Prospectus, the Issuer Free Writing
Prospectuses, or any “issuer information” filed or required to be filed pursuant
to Rule 433(d) under the Securities Act, collectively, or any omission or
alleged omission to state therein a material fact necessary to make the
statements therein, in the light of the circumstances in which they were
made,
not misleading or (iii) any information prepared by or on behalf of Potomac
Edison, PE Renaissance or the Issuer and provided to the Underwriters; provided,
however, that the indemnity agreement contained in this Section 12 shall
not
apply to any such losses, claims, damages, liabilities, expenses or actions
arising out of, or based upon, any such untrue statement or alleged untrue
statement, or any such omission or alleged omission, in each case if such
statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Issuer, PE Renaissance or Potomac
Edison
by any Underwriter, by or through the Representatives, expressly for use
in
connection with the preparation of the Registration Statement, the Pricing
Prospectus, the Final Prospectus or any Issuer Free Writing Prospectus or
any
amendment or supplement to either thereof, or arising out of, or based upon,
statements in or omissions from that part of the Registration Statement that
shall constitute the Statement of Eligibility under the Trust Indenture Act
of
the Indenture Trustee with respect to any indenture qualified pursuant to
the
Registration Statement; and provided further, that the indemnity agreement
contained in this Section 12 shall not inure to the benefit of any Underwriter
(or of any member, manager, employee, agent, officer or director of such
Underwriter or of any person controlling such Underwriter within the meaning
of
Section 15 of the Securities Act) on account of any such losses, claims,
damages, liabilities, expenses or actions, joint or several, arising from
the
sale of the Bonds to any person if a copy of the Pricing Prospectus (including
any amendment or supplement thereto if any amendments or supplements thereto
shall have been furnished to the Underwriters at or prior to the time of
the
sale involved) shall not have been given or sent to such person by or on
behalf
of such Underwriter with or prior to the sale of the Bonds to such person
unless
the alleged omission or alleged untrue
28
statement
was not corrected in the Pricing Prospectus (including any amendment or
supplement thereto if any amendments or supplements thereto shall have been
furnished to the Underwriters at or prior to the time of the sale involved)
at
the time of such sale. The indemnity agreement of Potomac Edison, PE Renaissance
and the Issuer contained in this Section 12 and the representations and
warranties of the Issuer, Potomac Edison and PE Renaissance contained in
Sections 3, 4 and 5 hereof shall remain operative and in full force and effect
regardless of any termination of this Underwriting Agreement or of any
investigation made by or on behalf of any Underwriter, its officers or its
directors or any such controlling person, and shall survive the delivery
of the
Bonds.
(b) Each
Underwriter shall severally indemnify, defend and hold harmless Potomac Edison,
PE Renaissance and the Issuer, each of Potomac Edison’s, PE Renaissance’s and
Issuer’s officers, directors, and managers, and each person who controls the
Issuer or Potomac Edison within the meaning of Section 15 of the Securities
Act,
from and against any and all losses, claims, damages or liabilities, joint
or
several, to which they or any of them may become subject under the Securities
Act or any other statute or common law and shall reimburse each of them for
any
reasonable legal or other expenses (including, to the extent hereinafter
provided, reasonable counsel fees) as and when incurred by them in connection
with investigating any such losses, claims, damages or liabilities or in
connection with defending any actions, insofar as such losses, claims, damages,
liabilities, expenses or actions arise out of or are based upon (i) any
untrue statement or alleged untrue statement of a material fact contained
in the
Registration Statement or any omission or alleged omission to state therein
a
material fact required to be stated therein or necessary to make the statements
therein not misleading or (ii) any untrue statement or alleged untrue
statement of a material fact contained in the Pricing Prospectus, the Final
Prospectus and, together with the Pricing Prospectus, the Issuer Free Writing
Prospectuses, collectively, or any omission or alleged omission to state
therein
a material fact necessary to make the statements therein, in the light of
the
circumstances in which they were made, not misleading; if such statement
or
omission was made in reliance upon and in conformity with information furnished
in writing to Potomac Edison, PE Renaissance or Issuer by such Underwriter,
through the Representatives, expressly for use in connection with the
preparation of the Registration Statement, the Pricing Prospectus, the Final
Prospectus or any Issuer Free Writing Prospectus or any amendment or supplement
to any of them. The only information furnished to Potomac Edison, PE Renaissance
and the Issuer by the Underwriters in writing expressly for use in such
foregoing documents is set forth in Schedule
IV
hereto.
The indemnity agreement of the respective Underwriters contained in this
Section
12 shall remain operative and in full force and effect regardless of any
termination of this Underwriting Agreement or of any investigation made by
or on
behalf of Potomac Edison, PE Renaissance or the Issuer, their directors,
managers or officers, any such Underwriter, or any such controlling person,
and
shall survive the delivery of the Bonds.
(c) Potomac
Edison, PE Renaissance, the Issuer and the several Underwriters each shall,
upon
the receipt of notice of the commencement of any action against it or any
person
controlling it as aforesaid, in respect of which indemnity may be sought
on
account of any indemnity agreement contained herein, promptly give written
notice of the commencement thereof to the party or parties against whom
indemnity shall be sought under (a) or (b) above, but the failure to notify
such
indemnifying party or parties of any such action shall not relieve such
indemnifying party or parties from any liability hereunder to the extent
such
indemnifying party
29
or
parties is/are not materially prejudiced as a result of such failure to notify
and in any event shall not relieve such indemnifying party or parties from
any
liability which it or they may have to the indemnified party otherwise than
on
account of such indemnity agreement. In case such notice of any such action
shall be so given, such indemnifying party shall be entitled to participate
at
its own expense in the defense, or, if it so elects, to assume (in conjunction
with any other indemnifying parties) the defense of such action, in which
event
such defense shall be conducted by counsel chosen by such indemnifying party
or
parties and reasonably satisfactory to the indemnified party or parties who
shall be defendant or defendants in such action, and such defendant or
defendants shall bear the fees and expenses of any additional counsel retained
by them; but if the indemnifying party shall elect not to assume the defense
of
such action, such indemnifying party will reimburse such indemnified party
or
parties for the reasonable fees and expenses of any counsel retained by them;
provided, however, if the defendants in any such action (including impleaded
parties) include both the indemnified party and the indemnifying party and
counsel for the indemnifying party shall have reasonably concluded that there
may be a conflict of interest involved in the representation by a single
counsel
of both the indemnifying party and the indemnified party, the indemnified
party
or parties shall have the right to select separate counsel, satisfactory
to the
indemnifying party, whose reasonable fees and expenses shall be paid by such
indemnifying party, to participate in the defense of such action on behalf
of
such indemnified party or parties (it being understood, however, that the
indemnifying party shall not be liable for the fees and expenses of more
than
one separate counsel (in addition to local counsel) representing the indemnified
parties who are parties to such action). Each of Potomac Edison, PE Renaissance,
Issuer and the several Underwriters agrees that without the other party’s prior
written consent, which consent shall not be unreasonably withheld, it will
not
settle, compromise or consent to the entry of any judgment in any claim in
respect of which indemnification may be sought under the indemnification
provisions of this Underwriting Agreement, unless such settlement, compromise
or
consent (i) includes an unconditional release of such other party from all
liability arising out of such 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 other party.
(d) If
the
indemnification provided for in subparagraph (a) or (b) above shall be
unenforceable under applicable law by an indemnified party, each indemnifying
party agrees to contribute to such indemnified party with respect to any
and all
losses, claims, damages, liabilities and expenses for which each such
indemnification provided for in subparagraph (a) or (b) above shall be
unenforceable, in such proportion as shall be appropriate to reflect
(i) the relative benefits received by Potomac Edison, PE Renaissance and
the Issuer on the one hand and the Underwriters on the other hand from the
offering of the Bonds pursuant to this Underwriting Agreement or (ii) if an
allocation solely on the basis provided by clause (i) is not permitted by
applicable law or is inequitable or against public policy, in such proportion
as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of each indemnifying party on the one
hand
and the indemnified party on the other in connection with the statements
or
omissions which have resulted in such losses, claims, damages, liabilities
and
expenses and (iii) any other relevant equitable considerations; provided,
however, that no indemnified party guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to
contribution from any indemnifying party not guilty of such fraudulent
misrepresentation. Relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact
or the
30
omission
or alleged omission to state a material fact relates to information supplied
by
such indemnifying party or the indemnified party and each such party’s relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. Potomac Edison, PE Renaissance, the Issuer
and each of the Underwriters agree that it would not be just and equitable
if
contributions pursuant to this subparagraph (d) were to be determined by
pro
rata allocation or by any other method of allocation which does not take
account
of the equitable considerations referred to above. Notwithstanding the
provisions of this Section 12, no Underwriter shall be required to contribute
in
excess of the amount equal to the excess of (i) the total underwriting
fees, discounts and commissions received by it, over (ii) the amount of any
damages which such Underwriter has otherwise been required to pay by reason
of
any such untrue or alleged untrue statement or omission or alleged omission.
The
obligations of each Underwriter to contribute pursuant to this Section 12
are
several and not joint and shall be in the same proportion as such Underwriter’s
obligation to underwrite Bonds is to the total number of Bonds set forth
in
Schedule
II
hereto.
13. Termination.
This Underwriting Agreement may be terminated, at any time prior to the Closing
Date with respect to the Bonds by the Representatives by written notice to
the
Issuer if after the date hereof and at or prior to the Closing Date
(a) there shall have occurred any general suspension of trading in
securities on the New York Stock Exchange (“NYSE”)
or
there shall have been established by the NYSE, or the over-the-counter market,
or by the Commission any general limitation on prices for such trading or
any
general restrictions on the distribution of securities, or a general banking
moratorium declared by New York or federal authorities or (b) there shall
have occurred any (i) material outbreak of hostilities (including, without
limitation, an act of terrorism) or (ii) declaration by the United States
of war or national or international calamity or crisis, including, but not
limited to, a material escalation of hostilities that existed prior to the
date
of this Underwriting Agreement or (iii) material adverse change in the
financial markets in the United States, and the effect of any such event
specified in clause (a) or (b) above on the financial markets of the United
States shall be such as to materially and adversely affect, in the reasonable
judgment of the Representatives, their ability to proceed with the public
offering or the delivery of the Bonds on the terms and in the manner
contemplated by the Final Prospectus. Any termination hereof pursuant to
this
Section 13 shall be without liability of any party to any other party except
as
otherwise provided in Sections 9(a)(viii) and 12 hereof.
14. Absence
of Fiduciary Relationship.
The Issuer, PE Renaissance and Potomac Edison each acknowledge and agree
that
the Underwriters are acting solely in the capacity of an arm’s length
contractual counterparty to the Issuer, PE Renaissance and Potomac Edison
with
respect to the offering of the Bonds contemplated hereby (including in
connection with determining the terms of the offering) and not as a financial
advisor or a fiduciary to, or an agent of, the Issuer, PE Renaissance or
Potomac
Edison. Additionally, none of the Underwriters is advising the Issuer, PE
Renaissance or Potomac Edison as to any legal, tax, investment, accounting
or
regulatory matters in any jurisdiction. The Issuer, PE Renaissance and Potomac
Edison shall consult with their own advisors concerning such matters and
shall
be responsible for making their own independent investigation and appraisal
of
the transactions contemplated hereby, and the Underwriters shall have no
responsibility or liability to the Issuer, PE Renaissance or Potomac Edison
with
respect thereto. Any review by the Underwriters of the Issuer, PE Renaissance
or
Potomac Edison, the transactions contemplated hereby or other
31
matters
relating to such transactions will be performed solely for the benefit of
the
Underwriters and shall not be on behalf of the Issuer, PE Renaissance or
Potomac
Edison.
15. Venue.
Each of the parties hereto irrevocably (i) agrees that any legal suit, action
or
proceeding against Potomac Edison, PE Renaissance or the Issuer brought by
any
Underwriter or by any person who controls any Underwriter within the meaning
of
either Section 15 of the Securities Act or Section 20 of the Exchange Act
arising out of or based upon this Agreement or the transactions contemplated
hereby may be instituted in any federal or state court located in the State
of
New York (each, a “New
York Court”),
(ii)
waives, to the fullest extent it may effectively do so, any objection which
it
may now or hereafter have to the laying of venue of any such proceeding,
(iii)
waives, to the fullest extent it may effectively do so, any objection based
on
the absence of a necessary or indispensable party in any such proceeding,
and
(iv) submits to the non-exclusive jurisdiction of such courts in any such
suit,
action or proceeding. Potomac Edison, PE Renaissance and the Issuer each
irrevocably waives any immunity to jurisdiction to which they may otherwise
be
entitled or become entitled (including sovereign immunity, immunity to
pre-judgment attachment, post-judgment attachment and execution) in any legal
suit, action or proceeding against them arising out of or based on this
Agreement or the transactions contemplated hereby which is instituted in
any New
York Court or in any foreign court. To the fullest extent permitted by law,
the
Issuer hereby waives any objection to the enforcement by any competent foreign
court of any judgment validly obtained in any such proceeding. The provisions
of
this Section 15 shall survive any termination of this Agreement, in whole
or in
part.
16. Notices.
All
communications hereunder will be in writing and may be given by United States
mail, courier service, telecopy, telefax or facsimile (confirmed by telephone
or
in writing in the case of notice by telecopy, telefax or facsimile) or any
other
customary means of communication, and any such communication shall be effective
when delivered, or if mailed, three days after deposit in the United States
mail
with proper postage for ordinary mail prepaid, and if sent to the
Representatives, to it at the address specified in Schedule I
hereto;
and if sent to Potomac Edison, to it at 000
Xxxxx
Xxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000,
Attention: Xxxxxx X. Xxxx, Esq.; and if sent to PE Renaissance, to it at
000
Xxxxx
Xxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000,
Attention: Xxxxxx X. Xxxx, Esq.; and if sent to the Issuer, to it at
000
Xxxxx
Xxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000,
Attention: Xxxxxx X. Xxxx, Esq. The parties hereto, by notice to the others,
may
designate additional or different addresses for subsequent
communications.
17. Successors.
This Underwriting Agreement will inure to the benefit of and be binding upon
the
parties hereto and their respective successors and the members, managers,
employees, agents, officers and directors and controlling persons referred
to in
Section 12 hereof, and no other person will have any right or obligation
hereunder.
18. Applicable
Law.
This Underwriting Agreement will be governed by and construed in accordance
with
the laws of the State of New York.
19. Counterparts.
This Underwriting Agreement may be signed in any number of counterparts,
each of
which shall be deemed an original, which taken together shall constitute
one and
the same instrument.
32
20. Integration.
This Agreement supersedes all prior agreements and understandings (whether
written or oral) among the Issuer, PE Renaissance Potomac Edison and the
Underwriters, or any of them, with respect to the subject matter
hereof.
[Remainder
of page intentionally left blank; signature page follows]
33
If
the
foregoing is in accordance with your understanding of our agreement, please
sign
and return to us the enclosed duplicate hereof, whereupon this Agreement
and
your acceptance shall represent a binding agreement among Potomac Edison,
PE
Renaissance, the Issuer and the several Underwriters.
Very
truly yours,
|
||
PE
ENVIRONMENTAL FUNDING LLC
|
||
By:
|
/s/ Xxxxxx X. Xxxxxxxx | |
Name:
Xxxxxx X. Xxxxxxxx
Title:
Vice President
|
||
THE
POTOMAC EDISON COMPANY
|
||
By:
|
/s/ Xxxxxx X. Xxxxxxxx | |
Name:
Xxxxxx X. Xxxxxxxx
Title:
Vice President
|
||
PE
RENAISSANCE FUNDING, LLC
|
||
By:
|
/s/ Xxxxxxxx X. Xxxxx | |
Name:
Xxxxxxxx X. Xxxxx
Title:
Vice President, Treasurer &
Secretary
|
Signature
Page to Potomac Edison Underwriting Agreement
S-1
The
foregoing Underwriting Agreement is hereby confirmed
and
accepted as of the date specified in Schedule
I
hereto.
|
||
FIRST
ALBANY CAPITAL INC.
|
||
By:
|
/s/ Xxxxxxx Xxxxxxx | |
Name:
Xxxxxxx Xxxxxxx
Title:
Senior Vice President
|
||
LOOP
CAPITAL MARKETS, LLC
|
||
By:
|
/s/ Xxxxx Xxxxxxxx | |
Name:
Xxxxx Xxxxxxxx
Title:
Chairman
|
Signature
Page to Potomac Edison Underwriting Agreement
S-2
SCHEDULE
I
Underwriting
Agreement dated April 3, 2007
Registration
Statement No. 333-139937
Representatives:
First
Albany Capital Inc.
00000
Xxxxxx Xxxxxxx
Xxxxx
000
Xxxxxx,
XX 00000
|
|
Loop
Capital Markets, LLC
000
Xxxx Xxxxxxx
Xxxxx
0000
Xxxxxxx,
XX 00000
|
Title,
Purchase Price and Description of Bonds:
Senior
Secured Sinking Fund Environmental Control Bonds, Series A
Total
Principal
Amount of Tranche |
Bond
Rate
|
Price
to Public
|
Underwriting
Discounts and Commissions
|
Proceeds
to Issuer
|
||||||||||||
Per
Tranche A-1 Bond
|
$
|
28,450,000
|
4.9820%
|
|
100.00%
|
|
0.30%
|
|
$
|
28,364,650
|
||||||
Per
Tranche A-2 Bond
|
$
|
25,700,000
|
5.2325%
|
|
100.00%
|
|
0.40%
|
|
$
|
25,597,200
|
||||||
Per
Tranche A-3 Bond
|
$
|
50,700,000
|
5.4625%
|
|
100.00%
|
|
0.50%
|
|
$
|
50,446,500
|
||||||
Per
Tranche A-4 Bond
|
$
|
9,975,000
|
5.5225%
|
|
100.00%
|
|
0.55%
|
|
$
|
9,920,138
|
||||||
Total
|
$
|
114,825,000
|
$
|
114,328,488
|
Original
Issue Discount (if any):
|
None.
|
|
Redemption
provisions:
|
None.
|
|
Closing
Date, Time and Location:
|
April
11, 2007
12:00
P.M. New York City time
Xxxxxx
Xxxx Xxxxx Raysman & Xxxxxxx LLP
000
Xxxxx Xxxxxx
Xxx
Xxxx, XX 00000
|
SCHEDULE
II
Principal
Amount of Bonds to be Purchased
Principal
Amount
|
||||||||||||||||
Underwriter
|
Tranche
X-0
|
Xxxxxxx
X-0
|
Xxxxxxx
X-0
|
Tranche
A-4
|
Total
|
|||||||||||
First
Albany Capital Inc.
|
$
|
13,450,000
|
$
|
25,700,000
|
$
|
50,700,000
|
$
|
9,975,000
|
$
|
99,825,000
|
||||||
Loop
Capital Markets, LLC
|
$
|
2,000,000
|
-
|
-
|
-
|
$
|
2,000,000
|
|||||||||
Bear,
Xxxxxxx & Co. Inc.
|
$
|
10,000,000
|
-
|
-
|
-
|
$
|
10,000,000
|
|||||||||
Scotia
Capital (USA) Inc.
|
$
|
3,000,000
|
-
|
-
|
-
|
$
|
3,000,000
|
|||||||||
Total
|
$
|
28,450,000
|
$
|
25,700,000
|
$
|
50,700,000
|
$
|
9,975,000
|
$
|
114,825,000
|
SCHEDULE
III
Schedule
of Issuer Free Writing Prospectuses
A.
|
Free
Writing Prospectuses not required to be
filed
|
Electronic
Road Show
B.
|
Free
Writing Prospectuses Required to be filed pursuant to Rule
433
|
Preliminary
Term Sheet
Pricing
Term Sheet
SCHEDULE
IV
DESCRIPTIVE
LIST OF UNDERWRITER PROVIDED INFORMATION
A. Pricing
Prospectus
The
entire seventh paragraph (except for the first, second, third and tenth
sentences thereof) under the section captioned “Plan of
Distribution.”
B. Final
Prospectus
Under
the
section captioned “Plan of Distribution”: (i) the second full paragraph
thereunder; (ii) the two paragraphs under the caption “- The Underwriters’ Sales
Price for the Bonds”, (iii) the third sentence under the caption “- No Assurance
as to Resale Price or Resale Liquidity for the Bonds”; and (iv) the first full
paragraph (except the eighth sentence thereof), the last sentence of the
second
full paragraph and the last sentence of the fifth full paragraph under
the
caption “- Various Types of Underwriter Transactions Which May Affect the
Price of the Bonds”.
EXHIBIT
10(e)
MATTERS
TO BE COVERED IN OPINION OF SPECIAL
DELAWARE
COUNSEL FOR POTOMAC EDISON AND THE ISSUER
A
federal
bankruptcy court would hold that Delaware law, and not federal law, governs
the
determination of what persons or entities have authority to file a voluntary
bankruptcy petition on behalf of the Issuer.
EXHIBIT
10(f)
MATTERS
TO BE COVERED IN OPINION OF SPECIAL
DELAWARE
COUNSEL FOR POTOMAC EDISON AND THE ISSUER
(1) The
Financing Statement (as defined in such opinion) is in an appropriate form
for
filing in the State of Delaware under Section 9-502(a) and 9-516 of the
Delaware
UCC (as hereinafter defined).
(2) Insofar
as Article 9 of the Uniform Commercial Code as in effect in the State of
Delaware on the date hereof (the “Delaware
UCC”)
is
applicable (without regard to conflict of laws principles), upon the filing
of
the Financing Statement with the Division (as defined in such opinion),
the
Indenture Trustee will have a perfected security interest in the Issuer’s rights
in that portion of the Collateral described in the Financing Statement
in which
a security interest may be perfected by the filing of a UCC financing statement
with the Division (the “Filing
Collateral”)
and
the proceeds (as defined in Section 9-102(a)(64) of the Delaware UCC) thereof,
and such security interest will be prior to any other security interest
in the
Filing Collateral granted by the Issuer that is perfected solely by the
filing
of financing statements with the Division under the Delaware UCC. Insofar
as
Article 9 of the Delaware UCC is applicable (without regard to conflict
of laws
principles), the Division is the appropriate place to file a financing
statement
to perfect a security interest except for as-extracted collateral or timber
to
be cut (as described in Section 9-501(a)(1)(A) of the Delaware UCC) or
fixture
filings where the collateral is goods that are or are to become fixtures
(as
described in Section 9-501(a)(1)(B) of the Delaware UCC).
(3) The
Uniform Commercial Code search report specified in such opinion sets forth
the
proper filing office and the proper debtor necessary to identify those
Persons
who under the Delaware UCC have on file financing statements against the
Issuer
covering the Filing Collateral as of the Effective Time. Such search report
identifies no secured party who has on file with the Division a currently
effective financing statement naming the Issuer as debtor and describing
the
Filing Collateral prior to the Effective Time.
(4) Insofar
as Article 9 of the Delaware UCC is applicable (without regard to conflict
of
laws principles), the provisions of the Indenture are sufficient to constitute
authorization by the Issuer of the filing of the Financing Statement for
purposes of Section 9-509 of the Delaware UCC.
(5) Insofar
as Article 9 of the Delaware UCC is applicable (without regard to conflict
of
laws principles), for purposes of the Delaware UCC, the Issuer is a “registered
organization” (as defined in Section 9-102(a)(70) of the Delaware
UCC).
EXHIBIT
10(g)
MATTERS
TO BE COVERED IN OPINION OF COUNSEL
FOR
THE ISSUER, PE RENAISSANCE AND POTOMAC EDISON
The
Transferred Environmental Control Property created by the Financing Order
is not
subject to the lien of Potomac Edison’s mortgage indenture, as amended and
supplemented.
EXHIBIT
10(h)(i)
MATTERS
TO BE COVERED IN OPINION OF COUNSEL
FOR
THE ISSUER, PE RENAISSANCE AND POTOMAC EDISON
(1) Potomac
Edison has been duly incorporated and is validly existing as a corporation
in
good standing under the laws of the States of Maryland and
Virginia.
(2) Potomac
Edison has the corporate power to execute, deliver and perform its obligations
under the PER LLC Agreement and the Transaction Documents to which Potomac
Edison is a party and to own, lease or operate its properties and conduct
its
business as described in the Registration Statement and the Final
Prospectus.
(3) The
execution, delivery and performance by Potomac Edison of the PER LLC Agreement
and the Transaction Documents to which Potomac Edison is a party and the
consummation by Potomac Edison of the transactions contemplated thereby
have
been duly authorized by all necessary corporate action on the part of Potomac
Edison, and each of the PER LLC Agreement and the Transaction Documents
to which
Potomac Edison is a party has been duly executed and delivered by Potomac
Edison.
(4) No
consent, approval or authorization of, or filing or registration with,
any
governmental body, authority or agency of the State of Maryland having
jurisdiction over Potomac Edison is required as a condition to the validity
of
the PER LLC Agreement and the Transaction Documents to which Potomac Edison
is a
party or in connection with the execution, delivery and performance by
Potomac
Edison of the PER LLC Agreement and the Transaction Documents to which
Potomac
Edison is a party, except such as (a) have been obtained or made or (b)
may be
required under the securities or real estate syndication laws of the State
of
Maryland.
(5) The
execution, delivery and performance by Potomac Edison of the PER LLC Agreement
and the Transaction Documents to which Potomac Edison is a party, each
in
accordance with its terms, do not violate: (a) the charter or bylaws of
Potomac
Edison; or (b) any law or any consent, order, rule, regulation or decree,
known
to such counsel, of any court or regulatory body, administrative agency
or other
governmental authority of the State of Maryland having jurisdiction over
Potomac
Edison or any of its properties.
EXHIBIT
10(h)(ii)
MATTERS
TO BE COVERED IN OPINION OF COUNSEL
FOR
THE ISSUER, PE RENAISSANCE AND POTOMAC EDISON
(1) Potomac
Edison is duly registered as a foreign corporation and is duly qualified
to
transact business, and in good standing, as a foreign corporation in the
State
of West Virginia.
(2) All
consents, approvals and authorizations of, or filings or registrations
with, any
governmental body, authority or agency applicable to Potomac Edison and
required
as a condition to the validity of the PER LLC Agreement and the Transaction
Documents to which Potomac Edison is a party or in connection with the
execution, delivery and performance by Potomac Edison of the PER LLC Agreement
and the Transaction Documents to which Potomac Edison is a party have been
obtained or made.
(3) The
execution, delivery and performance by Potomac Edison of the PER LLC Agreement
and the Transaction Documents to which Potomac Edison is a party, each
in
accordance with its terms, do not and will not violate any law or any consent,
order (including the Financing Order), rule, regulation or decree, known
to such
counsel, of any court or of any federal or state regulatory body, administrative
agency or other governmental authority having jurisdiction over Potomac
Edison
or any of its properties.
(4) Each
of
the Transaction Documents to which Potomac Edison is a party (other than
the
Underwriting Agreement and the Escrow Agreement, as to which such counsel
need
not express any opinion) constitutes the valid and legally binding obligation
of
Potomac Edison, enforceable against Potomac Edison in accordance with its
terms
under the laws of the State of West Virginia.
(5) Based
solely on such counsel’s review of the dockets in the jurisdictions specified in
such opinion and such counsel’s reliance on such certificate or certificates
specified in such opinion, there is no pending or, to such counsel’s knowledge,
threatened action, suit or proceeding before any court or governmental
agency,
authority or body or any arbitrator involving Potomac Edison or involving
or
relating to the Financing Order or the collection of the Environmental
Control
Charge or the use and enjoyment of the Transferred Environmental Control
Property under the Statute, or challenging the validity or enforceability
of any
of the PER LLC Agreement and the Transaction Documents, in each case which
is of
a character that should be disclosed in the Registration Statement or the
Final
Prospectus that is not adequately disclosed in the Registration Statement
or the
Final Prospectus, and, to the best of our knowledge, there is no contract
or
other document of a character required that should be described in the
Registration Statement or the Final Prospectus or filed as an exhibit to
the
Registration Statement that is not adequately described or filed.
EXHIBIT
10(h)(iii)
MATTERS
TO BE COVERED IN OPINION OF COUNSEL
FOR
THE ISSUER, PE RENAISSANCE AND POTOMAC EDISON
(1) All
consents, approvals and authorizations of, or filings or registrations
with, any
governmental body, authority or agency applicable to Potomac Edison and
required
as a condition to the validity of the PER LLC Agreement and the Transaction
Documents to which Potomac Edison is a party or in connection with the
execution, delivery and performance by Potomac Edison of the PER LLC Agreement
and the Transaction Documents to which Potomac Edison is a party have been
obtained or made.
(2) The
execution, delivery and performance by Potomac Edison of the PER LLC Agreement
and the Transaction Documents to which Potomac Edison is a party, each
in
accordance with its terms, do not and will not: (a) conflict with or breach
any
of the terms or provisions of, or constitute (with or without notice or
lapse of
time) a default under, any agreement of Potomac Edison specified in such
opinion; (b) result in the creation or imposition of any security interest
or
lien on any properties of Potomac Edison, pursuant to the terms of any
such
indenture, agreement or instrument known to such counsel (other than as
contemplated by the PER LLC Agreement, the Transaction Documents, the Financing
Order and the Statute); or (c) violate any law or any consent, order, rule,
regulation or decree, known to such counsel, of any court or of any federal
or
state regulatory body, administrative agency or other governmental authority
having jurisdiction over Potomac Edison or any of its properties.
(3) Based
solely on such counsel’s review of the dockets in the jurisdictions specified in
such opinion and such counsel’s reliance on such certificate or certificates
specified in such opinion, there is no pending or, to such counsel’s knowledge,
threatened action, suit or proceeding before any court or governmental
agency,
authority or body or any arbitrator involving Potomac Edison or involving
or
relating to the Financing Order or the collection of the Environmental
Control
Charge or the use and enjoyment of the Transferred Environmental Control
Property under the Statute, or challenging the validity or enforceability
of any
of the PER LLC Agreement and the Transaction Documents, in each case which
is of
a character that should be disclosed in the Registration Statement or the
Final
Prospectus that is not adequately disclosed in the Registration Statement
or the
Final Prospectus, and, to the best of our knowledge, there is no contract
or
other document of a character required that should be described in the
Registration Statement or the Final Prospectus or filed as an exhibit to
the
Registration Statement that is not adequately described or filed.
EXHIBIT
10(i)
MATTERS
TO BE COVERED IN OPINION OF COUNSEL
FOR
THE ISSUER, PE RENAISSANCE AND POTOMAC EDISON
In
the
event that either or both of Potomac Edison or PE Renaissance were to become
a
debtor in a case under the Title 11 of the United States Code, if the matter
were properly briefed and presented to a federal court exercising bankruptcy
jurisdiction and exercising reasonable judgment after full consideration
of all
relevant factors, the court would not order substantive consolidation of
the
assets and liabilities of the Issuer with those of the bankruptcy estate
of
either Potomac Edison or PE Renaissance.
EXHIBIT
10(j)
MATTERS
TO BE COVERED IN OPINION OF COUNSEL
FOR
THE ISSUER, PE RENAISSANCE AND POTOMAC EDISON
In
a
case, as a legal matter, and under existing law, if the case were properly
briefed and presented to a Federal Court exercising bankruptcy jurisdiction
and
exercising reasonable judgment after full consideration of all relevant
factors,
such court would hold that (i) the bankruptcy or dissolution of PE Renaissance
would not, by itself, cause the Issuer to be dissolved or its affairs to
be
wound up, (ii) a judgment creditor of PE Renaissance may not satisfy its
claims
against PE Renaissance by asserting these claims directly against the assets
of
the Issuer, and (iii) (A) the Issuer is a separate legal entity and (B)
the
existence of the Issuer as a separate legal entity will continue until
the
cancellation of the Issuer Certificate of Formation.
EXHIBIT
10(k)
MATTERS
TO BE COVERED IN OPINION OF COUNSEL
FOR
THE ISSUER, PE RENAISSANCE AND POTOMAC EDISON
(1) The
State
of West Virginia Pledge creates a contractual relationship between the
State of
West Virginia and the Bondholders.
(2) The
West
Virginia Supreme Court of Appeals, a West Virginia Circuit Court, or a
Federal
District Court sitting in West Virginia and applying West Virginia substantive
law (each a “West
Virginia Court”),
would
conclude, under applicable State of West Virginia constitutional principles
relating to the impairment of contracts, that the West Virginia Legislature
could not enact legislation (other than a law passed by the West Virginia
Legislature in the valid exercise of the state’s police power to safeguard the
vital interests of its people, including preservation of community order,
health, safety, morals or economic well being) that: (A) repeals the State
of
West Virginia Pledge, (B) repeals the Statute; (C) impairs the value of
the
Environmental Control Property; or (D) reduces, alters or impairs the collection
of the Environmental Control Charges so as to significantly impair: (i)
the
terms of the Indenture or the Bonds; or (ii) the rights and remedies of
the
holders of the Bonds (the “Bondholders”)
(or
the Trustee acting on their behalf) if such repeal, amendment or other
action
(an “Impairment
Action”)
would
prevent the payment of the Bonds or would significantly affect the security
for
the Bonds (an “Impairment”).
(3) The
State
of West Virginia would be required to pay just compensation to the Bondholders
if the State of West Virginia, including the PSCWV exercising its legislative
powers, undertook an Impairment Action and created an Impairment that:
(a)
constituted a permanent appropriation of a substantial property interest
of the
Bondholders in the Environmental Control Property or denied all economically
beneficial or productive use of the Environmental Control Property; (b)
destroyed the Environmental Control Property, other than in response to
so-called emergency conditions; or (c) substantially reduced, altered or
impaired the value of the Environmental Control Property so as to unduly
interfere with the reasonable expectations of the Bondholders arising from
their
investment in the Bonds.
(4) The
Statute has been duly enacted by the West Virginia Legislature in accordance
with all applicable laws and is in full force and effect. The effectiveness
or
constitutionality of the Statute under the Constitution of the State of
West
Virginia (insofar as it relates to the Bonds and to the transaction contemplated
by the Transaction Documents) is, to the best of such counsel’s knowledge, not
the subject of any pending appeal or litigation. If the constitutionality
of the
Statute were challenged, a West Virginia Court applying West Virginia
substantive law, would likely conclude, under applicable State of West
Virginia
constitutional principles, that the Statute is constitutional.
EXHIBIT
10(l)
MATTERS
TO BE COVERED IN OPINION OF COUNSEL
FOR
THE ISSUER, PE RENAISSANCE AND POTOMAC EDISON
(1) Based
on
Revenue Procedure 2005-62, 2005-37 IRB, for U.S. federal income tax purposes,
the Bonds will be treated as debt obligations of Potomac Edison, and neither
the
Issuer nor PE Renaissance will be subject to U.S. federal income tax as
entities
separate from Potomac Edison.
(2) The
statements set forth in the Prospectus under the sections captioned “Prospectus
Summary - Tax Treatment” and “Material U.S. Federal Tax Consequences,” to the
extent they constitute matters of U.S. federal income tax law or legal
conclusions with respect thereto, are correct in all material
respects.
(3) Based
on
Revenue Procedure 2005-62, 2005-37 IRB, for U.S. federal income tax purposes,
Potomac Edison will not be treated as recognizing gross income upon (a)
the
receipt of the Financing Order, (b) the receipt of cash or other valuable
consideration in exchange for the transfer of Environmental Control Property
to
PE Renaissance or to the Issuer, or (c) the receipt of cash or other valuable
consideration in exchange for the Bonds.
(4) Based
on
Revenue Procedure 2005-62, 2005-37 IRB, for U.S. federal income tax purposes,
the Environmental Control Charges are gross income to Potomac Edison recognized
under Potomac Edison’s usual method of accounting.
(5) The
statements set forth in the Prospectus under the sections captioned “Prospectus
Summary - ERISA Eligibility” and “ERISA Considerations,” to the extent they
constitute matters of law or legal conclusions with respect thereto, are
correct
in all material respects.
EXHIBIT
10(m)
MATTERS
TO BE COVERED IN OPINION OF COUNSEL
FOR THE ISSUER, PE RENAISSANCE AND POTOMAC EDISON
FOR THE ISSUER, PE RENAISSANCE AND POTOMAC EDISON
In
a case
under Title 11 of the United States Code in which either PE Renaissance
or
Potomac Edison is the debtor, if the case were properly briefed and presented
to
a federal court exercising bankruptcy jurisdiction and exercising reasonable
judgment after full consideration of all relevant factors, such court would
hold
that a contribution of the Transferred Environmental Control Property by
Potomac
Edison to PE Renaissance in the form and manner set forth in the Transfer
Agreement would constitute an absolute transfer of the Transferred Environmental
Control Property, rather than a borrowing by Potomac Edison secured by
the
Transferred Environmental Control Property.
EXHIBIT
10(n)
MATTERS
TO BE COVERED IN OPINION OF COUNSEL
FOR
THE ISSUER, PE RENAISSANCE AND POTOMAC EDISON
(1) Subdivision
(1), subsection (k) of the Statute (W. Va. Code § 24-2-4e(k)(1)) provides that
environmental control property that is specified in a financing order shall
constitute an existing, present property right, notwithstanding the fact
that
the imposition and collection of environmental control charges depend on
the
qualifying utility continuing to provide electric energy or continuing
to
perform its servicing functions relating to the collection of environmental
control charges or on the level of future energy consumption. Subdivision
(1),
subsection (m) of the Statute (X.Xx. Code § 24-2-4e(m)(1)) provides that any
sale, assignment or transfer of environmental control property shall be
an
absolute transfer and true sale of, and not a pledge of or secured transaction
relating to, the seller’s right, title and interest in, to and under the
environmental control property if the documents governing the transaction
expressly state that the transaction is a sale or other absolute transfer.
Upon
the Financing Order becoming effective, the delivery of the fully executed
Transfer Agreement to PE Renaissance and the receipt by Potomac Edison
of
consideration for the Environmental Control Property as specified therein,
the
Environmental Control Property constituted a vested, presently existing
property
right and the transfer of the Environment Control Property by Potomac Edison
to
PE Renaissance pursuant to the Transfer Agreement conveyed all of Potomac
Edison’s right, title and interest in, to and under the Environmental Control
Property to PE Renaissance. Upon the Financing Order becoming effective,
the
delivery of the fully executed Sale Agreement to the Issuer and the receipt
by
PE Renaissance of consideration for the Transferred Environmental Control
Property as specified therein, the Transferred Environmental Control Property
constituted a vested, presently existing property right and the transfer
of the
Transferred Environment Control Property by PE Renaissance to the Issuer
pursuant to the Sale Agreement conveyed all of PE Renaissance’s right, title and
interest in, to and under the Transferred Environmental Control Property
to the
Issuer.
(2) The
provisions of the Transfer Agreement are effective to constitute a sale
or other
absolute transfer to PE Renaissance of all of Potomac Edison’s right, title and
interest in, to and under the Environmental Control Property, and not a
pledge
of or secured transaction relating to the Environmental Control Property,
other
than for federal, state and local tax purposes and financial accounting
purposes. The provisions of the Sale Agreement are effective to constitute
a
sale or other absolute transfer to the Issuer of all of PE Renaissance’s right,
title and interest in, to and under the Transferred Environmental Control
Property, and not a pledge of or secured transaction relating to the Transferred
Environmental Control Property, other than for federal, state and local
tax
purposes and financial accounting purposes.
(3) Each
of
the Financing Statement naming Potomac Edison, as debtor, and PE Renaissance,
as
secured party, specified in such opinion (the “Potomac
Edison Financing Statement”)
and
the Financing Statement naming PE Renaissance, as debtor, and U.S. Bank
National
Association, as secured party, specified in such opinion (the “PE
Renaissance Financing Statement”
and,
together with the Potomac Edison Financing Statement, the “Financing
Statements”)
is in
appropriate form for filing with the office of the West Virginia Secretary
of
State. Upon the proper filing of the Financing Statements with the West
Virginia
Secretary of
Exhibit
10(n)-1
State,
together with the tender of the required filing fees, the transfer by Potomac
Edison of the Environmental Control Property to PE Renaissance and the
transfer
by PE Renaissance of the Transferred Environmental Control Property to
the
Issuer was perfected as against third persons.
(4) The
transfer by Potomac Edison of the Environmental Control Property to PE
Renaissance has been perfected as against third persons by the issuance
of the
Financing Order by the PSCWV, the execution and delivery of the Transfer
Agreement by the parties thereto, the receipt of value and the filing of
the
Potomac Edison Financing Statement in accordance with the Statute. The
transfer
by PE Renaissance of the Transferred Environmental Control Property to
the
Issuer has been perfected as against third persons by the issuance of the
Financing Order by the PSCWV, the execution and delivery of the Sale Agreement
by the parties thereto, the receipt of value and the filing of the PE
Renaissance Financing Statement in accordance with the Statute. No further
or
subsequent filing, refiling, recording, re-recording, registration or
re-registration will be necessary in the State of West Virginia in order
to
continue the perfection of such security interest except that under the
West
Virginia Uniform Commercial Code, which is referred to by the Statute,
continuation statements with respect to the PE Renaissance Financing Statement
must be filed in the Office of the West Virginia Secretary of State within
six
months prior to the expiration of each five-year period (measured from
the date
the financing statement was originally filed) in order to continue the
perfected
status of such security interest.
(5) Based
solely on the Uniform Commercial Code search report specified in such opinion,
and such counsel’s review on the date of such opinion of an electronic search of
the applicable filing records maintained by the West Virginia Secretary
of
State, and assuming the accuracy and completeness of such records, the
transfer
by Potomac Edison of the Environmental Control Property to PE Renaissance
has
priority over any transfer of the Environmental Control Property by Potomac
Edison and is subject to no liens created prior to such transfer and the
transfer by PE Renaissance of the Transferred Environmental Control Property
to
the Issuer has priority over any other transfer of the Transferred Environmental
Control Property by PE Renaissance and is subject to no liens created prior
to
such transfer.
Exhibit
10(n)-2
EXHIBIT
10(o)
MATTERS
TO BE COVERED IN OPINION OF COUNSEL
FOR
THE ISSUER, PE RENAISSANCE AND POTOMAC EDISON
(1) A
court
would conclude that the State of West Virginia would be required to pay
just
compensation to the Bondholders if the State of West Virginia, including
the
PSCWV exercising its legislative powers, undertook a repeal or amendment
of the
Statute or any other action or failed to take any action required by the
State
of West Virginia Pledge (any such repeal, amendment, action or inaction
is
herein referred to as an “Impairment
Action”)
after
the Bonds are issued, but before they are fully paid that would (a) appropriate
the Transferred Environmental Control Property or deny productive use of
the
Transferred Environmental Control Property; (b) destroy the Transferred
Environmental Control Property; or (c) substantially reduce, alter or impair
the
value of the Transferred Environmental Control Property.
(2) The
State
of West Virginia Pledge creates a contractual relationship between the
State of
West Virginia and the Bondholders.
(3) The
Bondholders could successfully challenge under the Contract Clause of the
United
States Constitution the constitutionality of an Impairment Action that
limits,
alters, impairs or reduces the value of the Transferred Environmental Control
Property or the Environmental Control Charges prior to the time that the
Bonds
are fully paid and discharged.
(4) Preliminary
injunctive relief would be available under federal law to delay implementation
of an Impairment Action that limits, alters, impairs or reduces the value
of the
Transferred Environmental Control Property or the Environmental Control
Charges
pending final adjudication of a claim challenging such Impairment Action
under
the Contract Clause, and assuming a favorable final adjudication of such
claim,
whether relief would be available to prevent permanently the implementation
of
such Impairment Action.
EXHIBIT
10(p)
MATTERS
TO BE COVERED IN OPINION OF
COUNSEL
FOR THE INDENTURE TRUSTEE
(1) The
Indenture Trustee is a national banking association duly organized, validly
existing and in good standing under the laws of the United States of
America.
(2) The
Indenture Trustee has duly authorized, executed and delivered each of the
Transaction Documents. Assuming the due authorization, execution and delivery
thereof by the other parties thereto, each of the Transaction Documents
is the
legal, valid and binding agreement of the Indenture Trustee, enforceable
in
accordance with its terms against the Indenture Trustee.
(3) The
Bonds
have been duly and validly authenticated by the Indenture Trustee, upon
the
order of the Issuer.
(4) The
Indenture Trustee is duly authorized and empowered to exercise trust powers
under applicable law.
(5) Neither
the authentication of the Bonds, nor the execution, delivery or performance
of
any of the Transaction Documents, does now, or will hereafter, conflict
with,
result in a breach of or constitute a default under any term or provision
of the
Articles of Association or Bylaws of the Indenture Trustee, any term or
provision of any agreement, contract, instrument or indenture of any nature
whatsoever, known to us, to which the Indenture Trustee is a party or by
which
it is bound, or, to the best of such counsel’s knowledge, any order, judgment,
writ, injunction or decree of any court or governmental authority having
jurisdiction over the Indenture Trustee.
(6) To
the
best of such counsel’s knowledge, there are no actions, proceedings or
investigations pending or threatened against the Indenture Trustee before
any
court, administrative agency or tribunal (a) asserting the invalidity of
the
Bonds or any of the Transaction Documents, (b) seeking to prevent the issuance
of the Bonds or consummation of any of the transactions contemplated by
the
Bonds or the Transaction Documents, or (c) that might materially and adversely
affect the performance by the Indenture Trustee of its obligations under,
or the
validity or enforceability of, the Bonds or any of the Transaction
Documents.
(7) The
execution, delivery and performance by the Indenture Trustee of the Transaction
Documents will not violate any provisions of any law or regulation governing
the
banking and trust powers of the Indenture Trustee. Such execution, delivery
and
performance will not require the authorization, consent or approval of,
the
giving of notice to, the filing or registration with, or the taking of
any other
action in respect of any governmental authority or agency regulating the
activities of the Indenture Trustee.
EXHIBIT
10(q)
MATTERS
TO BE COVERED IN OPINION OF COUNSEL
FOR
THE ISSUER, PE RENAISSANCE AND POTOMAC EDISON
(1) The
Financing Order has been duly authorized and issued by the PSCWV in accordance
with all applicable laws, rules and regulations, including the Statute.
The
Financing Order is in full force and effect and is final and
non-appealable.
(2) The
Statute has been duly enacted by the Legislature of the State of West Virginia
in accordance with all applicable laws and is in full force and effect.
To the
best of such counsel’s knowledge, the effectiveness and constitutionality of the
Statute, insofar as it relates to the transactions contemplated by the
Transaction Documents (collectively, the “Transaction”),
is
not the subject of any pending appeal or litigation.
(3) Subdivision
(1), subsection (f) of the Statute (W. Va. Code §24-2-4e(f)(1)) provides that
the Financing Order is irrevocable and the PSCWV may not reduce, impair,
postpone or terminate the Environmental Control Charges approved in the
Financing Order or impair the Environmental Control Property or the collection
or recovery of the Environmental Control Revenues. Subdivision (2), subsection
(f) of the Statute (W. Va. Code §24-2-4e(f)(2)) provides that on and after the
date of issuance of the Bonds issued pursuant to the Financing Order, the
ability of the PSCWV to amend the Financing Order is subject to the limitations,
among others, that are set forth in subdivision (1), subsection (f) of
the
Statute (W. Va. Code §24-2-4e(f)(1)) specified above. Subdivision (1),
subsection (h) of the Statute (W. Va. Code §24-2-4e(h)(1)) provides that the
Financing Order shall remain in effect until the Bonds issued pursuant
to the
Financing Order have been paid in full and all “financing costs” (as that term
is defined in subdivision (14), subsection (b) of the Statute (W. Va. Code
§24-2-4e(b)(14)) relating to the Bonds have been paid in full. Subdivision
(2),
subsection (k) of the Statute (W. Va. Code §24-2-4e(k)(2)) provides that all
Environmental Control Property specified in the Financing Order shall continue
to exist until the Bonds are paid in full and all financing costs relating
to
the Bonds have been paid in full. Subdivision (5), subsection (l) of the
Statute
(W. Va. Code §24-2-4e(l)(5)) provides that no subsequent order of the PSCWV
amending the Financing Order pursuant to the authority set forth in subdivision
(2), subsection (f) of the Statute described above (W. Va. Code §24-2-4e(f)(2))
will affect the validity, perfection, or priority of a security interest
in or
transfer of the Environmental Control Property. Subdivision (1), subsection
(q)
of the Statute (W. Va. Code §24-2-4e(q)(1)) provides that the State of West
Virginia pledges to and agrees with any “assignee,” any “bondholder,” and any
“financing party” (as those terms are defined in subdivisions (3), (4), and
(16), respectively, subsection (b) of the Statute (W. Va. Code §24-2-4e(b)(3),
(4), and (16)) that the State will not (i) take or permit any action that
impairs the value of the Environmental Control Property or (ii) except
as
permitted under the adjustment mechanism specified in subsection (e) of
the
Statute (W. Va. Code §24-2-4e(e)), reduce, alter or impair the Environmental
Control Charges until the principal, interest, and redemption premium in
respect
of the Bonds, together with all financing costs and all amounts to be paid
to an
assignee or financing party under an ancillary agreement (as that term
is
defined in subdivision (2), subsection (b) of the Statute (W. Va. Code
§24-2-4e(b)(2)) are paid or performed in full. The foregoing provisions
of the
Statute, as well as all other provisions of the Statute, apply to the
Transaction.
Exhibit
10(q)-1
(4) The
Bonds
are “environmental control bonds” within the meaning of subdivision (6),
subsection (b) of the Statute (W. Va. Code §24-2-4e(b)(6)) and are entitled to
the protections provided under the Statute, including those identified
in
paragraph 3 above.
(5) Each
of
PE Renaissance and the Issuer is an “assignee” within the meaning of subdivision
(3), subsection (b) of the Statute (W. Va. Code §24-2-4e(b)(3)).
(6) There
is
presently no judicial, statutory or constitutional authority in the State
of
West Virginia for a voter initiative or referendum for the purpose of amending
or repealing the Statute.
(7) Subsection
(v) of the Statute (W. Va. Code §24-2-4e(v)) provides that if any subsection,
subdivision, paragraph or subparagraph of the Statute or the application
thereof
to any person, circumstance or transaction is held by a court of competent
jurisdiction to be unconstitutional or invalid, the unconstitutionality
or
invalidity shall not affect the constitutionality or validity of any other
subsection, subdivision, paragraph or subparagraph of the Statute or its
application or validity to any person, circumstance or transaction, including,
without limitation, the irrevocability of a financing order issued pursuant
to
the Statute, the validity of the issuance of environmental control bonds,
the
imposition of environmental control charges, the transfer or assignment
of
environmental control property or the collection and recovery of environmental
control revenues. Subsection (v) of the Statute further provides that a
declaration by the West Virginia Legislature that the provisions of the
Statute
are intended to be severable and that the West Virginia Legislature would
have
enacted the Statute even if any subsection, subdivision, paragraph or
subparagraph of the Statute held to be unconstitutional or invalid had
not been
included in the Statute. Accordingly, pursuant to the provisions of subsection
(v) of the Statute, the provisions of the Statute are severable, such that
if
any provision of the Statute or its application to any person, circumstance
or
transaction is held invalid by any court of competent jurisdiction, the
invalidity shall not affect any other provision or the application of the
Statute which can be given effect without the invalid provision or
application.
(8) The
Financing Order authorizes, among other things: (i) the issuance of the
Bonds;
(ii) the sale or other absolute transfer of the Environmental Control Property
to PE Renaissance and the sale or other absolute transfer of the Transferred
Environmental Control Property to the Issuer; (iii) the Issuer’s pledge of the
Transferred Environmental Control Property to the Indenture Trustee in
accordance with the Indenture; (iv) the imposition of the Environmental
Control
Charges; (v) the Issuer’s right, as assignee, to charge, collect and receive the
Environmental Control Charges and to make periodic adjustments of the
Environmental Control Charges. Pursuant to subdivision (1), subsection
(f) of
the Statute (W. Va. Code §24-2-4e(f)(1)) described in paragraph 3 above, on and
after the date of issuance of the Bonds, the authorizations in the Financing
Order set forth in the immediately preceding sentence will be irrevocable.
(9) The
Transaction, as contemplated by the Transaction Documents, conforms in
all
material respects to the terms of the Financing Order.
Exhibit
10(q)-2
EXHIBIT
10(r)
MATTERS
TO BE COVERED IN OPINION OF COUNSEL
FOR
THE ISSUER, PE RENAISSANCE AND POTOMAC EDISON
(1) In
accordance with the Statute, (a) upon the contribution by Potomac Edison
of the
Environmental Control Property to PE Renaissance, PE Renaissance shall
have all
the rights of Potomac Edison with respect to such Environmental Control
Property, including such rights to exercise any and all rights and remedies
with
respect thereto, including such rights to impose, collect and receive any
amounts payable by any Customer in respect of the Environmental Control
Property; (b) the rights and interests of Potomac Edison under the Financing
Order, including the right to impose, collect and receive the environmental
control charges authorized in the Financing Order, are assignable and shall
become “Environmental Control Property” within the meaning of the Statute when
they are first contributed by Potomac Edison to PE Renaissance for the
subsequent sale by PE Renaissance to the Issuer in connection with the
issuance
of the Bonds; (c) upon the transfer by PE Renaissance of the Transferred
Environmental Control Property to the Issuer, the Issuer shall have all
the
rights of PE Renaissance with respect to such Transferred Environmental
Control
Property, including such rights to exercise any and all rights and remedies
with
respect thereto, including such rights to impose, collect and receive any
amounts payable by any Customer in respect of the Transferred Environmental
Control Property; (d) the Financing Order approves the issuance by the
Issuer of
the Bonds in an aggregate principal amount which equals or exceeds the
Bonds
being issued on the date hereof; and (e) the Bonds are “environmental control
bonds” within the meaning of the Statute.
(2) No
authorization, consent, approval, license, permit, certificate, exemption
of, or
filing or registration with, any Governmental Authority (“Governmental
Approvals”)
is
required for the valid issuance, authentication and delivery of the Bonds
or the
performance by PE Renaissance or the Issuer of its respective obligations
under
each Transaction Document to which the Issuer is a party, except for (a)
the
Financing Order and the Governmental Approvals expressly contemplated therein,
each of which has been obtained on or prior to the date hereof, and (b)
the
filings contemplated by paragraphs 4, 5 and 6, below.
(3) A
West
Virginia state court or a federal court applying West Virginia conflict-of-law
rules would give effect to the choice of the laws of West Virginia as the
governing law of the Transaction Documents that by their terms purport
to be
governed by West Virginia law.
(4) Under
the
terms of the Statute, the transfer of the Environmental Control Property
from
Potomac Edison to PE Renaissance and the subsequent transfer of the Transferred
Environmental Control Property by PE Renaissance to the Issuer each is
perfected
in accordance with Section (m) of the Statute against all subsequently
filing
third parties, including subsequent judicial or other lien creditors upon
the
filing of a financing statement with the West Virginia Secretary of State.
No
further or subsequent filing, refiling, recording, re-recording, registration,
re-registration or other action will be necessary in the State of West
Virginia
in order to continue the perfection of such transfer except that under
Chapter
46, Article 9 of the Code of West Virginia, 1931, as amended (the “UCC”),
which
is referred to by the Statute, continuation
Exhibit
10(r)-1
statements
must be filed in the Office of the West Virginia Secretary of State within
six
months prior to the expiration of each five-year period (measured from
the date
the financing statement was originally filed) in order to continue the
perfected
status of such transfer.
(5) All
filings with, and orders of, the PSCWV pursuant to the Statute that are
necessary to transfer the Environmental Control Property from Potomac Edison
to
PE Renaissance and subsequently to transfer the Transferred Environmental
Control Property from PE Renaissance to the Issuer have been executed and
filed.
Except for continuation filings with the West Virginia Secretary of State
described above, all filings, including filings with the PSCWV and the
West
Virginia Secretary of State pursuant to the Statute that are necessary
to fully
preserve and protect the interests of PE Renaissance in the Environmental
Control Property and the interests of the Issuer in the Transferred
Environmental Control Property have been executed and filed.
(6) A
valid
and enforceable lien and security interest in the Transferred Environmental
Control Property has been created and has attached in favor of the Indenture
Trustee (on behalf of the Secured Parties) by the execution and delivery
of a
security agreement, being the Indenture, by the Issuer in connection with
the
issuance and funding of the Bonds, all as ordered by the Financing Order.
Such
lien has been perfected in accordance with Section (l) of the Statute and
in
accordance with the Financing Order. Such lien has priority in the order
of
filing and takes precedence over any subsequent judicial or other lien
creditor.
Based solely on the Search Certificates (as defined in such opinion), and
such
counsel’s review on the date hereof of an electronic search of the applicable
filing records maintained by the West Virginia Secretary of State, such
lien is
first priority. No further or subsequent filing, refiling, recording,
re-recording, registration, re-registration or other actions will be necessary
in the State of West Virginia in order to continue the perfection of such
security interest except that under the UCC, which is referred to by the
Statute, continuation statements must be filed in the Office of the West
Virginia Secretary of State within six months prior to the expiration of
each
five-year period (measured from the date the financing statement was originally
filed) in order to continue the perfected status of such security
interest.
(7)
The
Search Certificates identify no secured party who has filed with the West
Virginia Secretary of State naming PE Renaissance, Potomac Edison or the
Issuer
as debtor and describing any of the Collateral for the Bonds contemplated
by the
Financing Order.
(8) The
financing statements attached to such opinion are in appropriate form for
filing, and have been filed, pursuant to Sections (l) and (m) of the
Statute.
(9) Each
of
the Transaction Documents that by its terms purports to be governed by
the laws
of the State of West Virginia is a legal, valid and binding obligation
of PE
Renaissance, the Issuer and/or the Administrator, as the case may be,
enforceable against such party in accordance with its respective
terms.
(10) (a)
To
the extent that the provisions of Section (l) of the Statute apply to the
grant
of a security interest by the Issuer in the Series Collateral, including
the
Transferred Environmental Control Property pursuant to Section (l) of the
Statute and to the Financing Order, pursuant to the Indenture, then upon
the
later of the time (i) the Financing Order is issued, (ii) the
Exhibit
10(r)-2
Indenture
is executed and delivered and (iii) value is received for the Bonds, (A)
the
Indenture will create in favor of the Indenture Trustee a security interest
in
the rights of the Issuer in the Series Collateral, (B) such security interest
will be valid and enforceable against the Issuer and third parties (subject
to
the rights of any third parties holding security interests in such Series
Collateral in the manner describe in Subsection (l)(3) of the Statute)
and has
attached, (C) once the filing of a financing statement is made in accordance
with Section (l) of the Statute, such security interest will be perfected,
and
(D) such perfected security interest will be of first priority; and (b)
to the
extent that the provisions of Section (l) of the Statute do not apply to
the
grant of a security interest by the Issuer in the Series Collateral pursuant
to
the Indenture (but without opining that such provisions do not apply),
then upon
the receipt of value by the Issuer with respect to the Series Collateral,
(A)
the Indenture will create in favor of the Indenture Trustee a security
interest
in the rights of the Issuer in the Series Collateral, (B) such security
interest
will be enforceable against the Issuer and third parties with respect to
such
Series Collateral, (C) such security interest will be perfected upon the
filing
of a financing statement in accordance with the Statute and the Delaware
Uniform
Commercial Codes, and (D) with respect to West Virginia only, such perfected
security interest will be of first priority. Our opinion with respect to
priority is based solely on the Search Certificates, and our review on
the date
hereof of an electronic search of the applicable filing records maintained
by
the West Virginia Secretary of State.
Exhibit
10(r)-3
EXHIBIT
10(s)
MATTERS
TO BE COVERED IN OPINION OF COUNSEL
FOR
THE ISSUER, PE RENAISSANCE AND POTOMAC EDISON
A
bankruptcy court, in determining the Issuer’s authority to commence a voluntary
case (a “Voluntary
Case”)
under
Title 11 of the United States Code, would hold that compliance with those
provisions of the Issuer LLC Agreement requiring the prior unanimous written
consent of the Issuer’s managers, including independent managers, to commence a
Voluntary Case is necessary in order to commence a Voluntary
Case.
EXHIBIT
10(t)
MATTERS
TO BE COVERED IN OPINION OF SPECIAL
DELAWARE
COUNSEL FOR POTOMAC EDISON AND THE ISSUER
(1) The
Issuer has been duly formed and is validly existing in good standing as
a
limited liability company under the laws of the State of Delaware. PE
Renaissance has been duly formed and is validly existing in good standing
as a
limited liability company under the laws of the State of Delaware.
(2) The
certificate of formation of the Issuer (the “Certificate”)
has
been duly filed with the Secretary of State of the State of Delaware. The
certificate of formation of PE Renaissance (the “PER
Certificate”)
has
been duly filed with the Secretary of State of the State of
Delaware.
(3) The
Issuer LLC Agreement constitutes a legal, valid and binding agreement of
PE
Renaissance, as sole member (the “Member”),
and
is enforceable against the Member, in its capacity as member of the Issuer,
in
accordance with its terms. The PER LLC Agreement constitutes a legal, valid
and
binding agreement of Potomac Edison, as sole member (the “PER
Member”),
and
is enforceable against the PER Member, in its capacity as member of PE
Renaissance, in accordance with its terms.
(4) Under
the
LLC Act and the Issuer LLC Agreement, the Issuer has the limited liability
company power and authority to execute and deliver the Transaction Documents
to
which it is a party and the Bonds and to perform its obligations thereunder.
Under the LLC Act and the Issuer LLC Agreement, the execution and delivery
by
the Issuer of the Transaction Documents to which it is a party and the
Bonds,
and the performance by the Issuer of its obligations thereunder, have been
duly
authorized by all necessary limited liability company action on the part
of the
Issuer. The Transaction Documents to which the Issuer is a party and the
Bonds
have been duly executed and delivered by the Issuer.
(5) Under
the
LLC Act and the PER LLC Agreement, PE Renaissance has the limited liability
company power and authority to execute and deliver the Transaction Documents
to
which it is a party and to perform its obligations thereunder. Under the
LLC Act
and the PER LLC Agreement, the execution and delivery by PE Renaissance
of the
Transaction Documents to which it is a party, and the performance by the
Issuer
of its obligations thereunder, have been duly authorized by all necessary
limited liability company action on the part of PE Renaissance. The Transaction
Documents to which PE Renaissance it is a party have been duly executed
and
delivered by PE Renaissance.
(6) Neither
the execution or delivery by the Issuer, PE Renaissance or Potomac Edison
of the
Transaction Documents to which it is a party or the Bonds, if applicable,
nor
the compliance by the Issuer, PE Renaissance or Potomac Edison, as the
case may
be, with the terms thereof, nor the consummation by the Issuer, PE Renaissance
or Potomac Edison, as the case may be, of any of the transactions contemplated
thereby requires the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action with respect to any
Delaware court, or Delaware governmental or Delaware regulatory authority
or
Delaware
Exhibit
10(t)-1
agency
under the laws of the State of Delaware, except for the filing of the
Certificate and the PER Certificate with
the
Secretary of State of the State of Delaware, which certificates have been
duly
filed.
(7) Neither
the execution and delivery by the Issuer, PE Renaissance or Potomac Edison
of
the Transaction Documents to which it is a party or the Bonds, if applicable,
nor the compliance by the Issuer, PE Renaissance or Potomac Edison, as
the case
may be, with the terms thereof, nor the consummation by the Issuer, PE
Renaissance or Potomac Edison, as the case may be, of any of the transactions
contemplated thereby conflicts with or constitutes a breach of or default
under
the Certificate, the PER Certificate, the PER LLC Agreement or the Issuer
LLC
Agreement, or violates any law, governmental rule or regulation of the
State of
Delaware.
(8) Based
solely on an inquiry on a recent date (as specified in such opinion) limited
to,
and solely to the extent reflected on the results of computer searches
of, court
dockets for active cases of the Court of Chancery of the State of Delaware
in
and for New Castle County, Delaware, of the Superior Court of the State
of
Delaware in and for New Castle County, Delaware, and of the United States
District Court sitting in the State of Delaware, we are not aware of any
legal
or governmental proceeding pending against the Issuer or PE
Renaissance.
(9) If
properly presented to a Delaware court, a Delaware court applying Delaware
law
would conclude that (i) in order for any Person to file a voluntary bankruptcy
petition on behalf of the Issuer, the prior unanimous consent of the managers
of
the Issuer, including each of the Independent Managers, as provided in
Section
3.04(b) of the Issuer LLC Agreement, is required and (ii) such provision,
contained in Section 3.04(b) of the Issuer LLC Agreement that requires
the prior
unanimous consent of the managers of the Issuer, including each of the
Independent Managers, in order for a Person to file a voluntary bankruptcy
petition on behalf of the Issuer, constitutes a legal, valid and binding
agreement of the Member, and is enforceable against the Member, in accordance
with its terms.
(10) Under
the
LLC Act and the Issuer LLC Agreement, the bankruptcy (as defined in the
LLC Act)
or dissolution of the Member will not, by itself, cause the Issuer to be
dissolved or its affairs to be wound up.
(11) While
under the LLC Act, on application to a court of competent jurisdiction,
a
judgment creditor of the Member may be able to charge the Member’s share of any
profits and losses of the Issuer and the Member's right to receive distributions
of the Issuer’s assets (the “Member’s
Interest”),
to
the extent so charged, the judgment creditor has only the right to receive
any
distribution or distributions to which the Member would otherwise have
been
entitled in respect of such Member’s Interest. Under the LLC Act, no creditor of
the Member shall have any right to obtain possession of, or otherwise exercise
legal or equitable remedies with respect to, the property of the Issuer.
Thus,
under the LLC Act, a judgment creditor of the Member may not satisfy its
claims
against the Member by asserting a claim against the assets of the
Issuer.
Exhibit
10(t)-2
(12) Under
the
LLC Act (i) the Issuer is a separate legal entity, and (ii) the existence
of the Issuer as a separate legal entity shall continue until the cancellation
of the Certificate.
(13) Under
the
LLC Act and the LLC Agreement, the issuance of the Bonds has been duly
authorized by all necessary limited liability company action the part of
the
Issuer.
Exhibit
10(t)-3
EXHIBIT
10(u)
MATTERS
TO BE COVERED IN OPINION OF COUNSEL
FOR
THE ISSUER, PE RENAISSANCE AND POTOMAC EDISON
The
description of those material West Virginia tax consequences contained
in the
Registration Statement under the heading “Material West Virginia Tax
Consequences” is accurate in all material respects.
EXHIBIT
10(v)
MATTERS
TO BE COVERED IN OPINION OF COUNSEL
FOR
THE ISSUER, PE RENAISSANCE AND POTOMAC EDISON
(1) The
Issuer has the power and authority to execute and deliver the Indenture
and to
issue the Bonds applied for; each of the Underwriting Agreement, the Escrow
Agreement, the Indenture and the Bonds applied for have been duly authorized,
executed and delivered; and the Issuer is duly organized and in good standing
under the laws of the State of Delaware.
(2) The
Bonds, when authenticated in accordance with the provisions of the Indenture
and
delivered, will constitute valid and binding obligations of the Issuer
entitled
to the benefits of the Indenture, enforceable in accordance with the terms
of
the Bonds except as such enforceability may be subject to bankruptcy,
insolvency, moratorium, reorganization and other similar laws affecting
the
rights and remedies of creditors generally and general principles of equity
(regardless of whether such enforceability is considered in a proceeding
in
equity or at law).
(3) Each
of
the Underwriting Agreement, the Escrow Agreement, and the Indenture is
a valid
and binding agreement of the Issuer, enforceable in accordance with its
terms
except as such enforceability may be subject to bankruptcy, insolvency,
moratorium, reorganization and other similar laws affecting the rights
and
remedies of creditors generally and general principles of equity (regardless
of
whether such enforceability is considered in a proceeding in equity or
at
law).
(4) The
Indenture has been duly qualified under the Trust Indenture Act.
(5) The
Issuer is not and, after giving effect to the offer and sale of the Bonds
and
application of the proceeds as described in the Final Prospectus, will
not be,
an “investment company” or under the “control” of an “investment company” as
such terms are defined under the Investment Company Act of 1940, as
amended.
(6) All
instruments furnished to the Indenture Trustee conform to the requirements
of
the Indenture and constitute all the documents required to be delivered
hereunder for the Indenture Trustee to authenticate and deliver the Bonds
applied for, and all conditions precedent provided for in the Indenture
relating
to the authentication and delivery of the Bonds have been complied
with.
(7) The
Registration Statement is effective under the Securities Act and, to the
best
knowledge of such counsel and information, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or threatened.
(8) The
statements made in the Pricing Prospectus and the Final Prospectus (i)
under the
headings “Description of the Bonds” (other than the statements under the
subheading “Description of the Bonds—Book Entry Registration”), “Security for
the Bonds”, “The Transfer Agreement”, “The Sale Agreement”, “The Servicing
Agreement” and “The Administration
Exhibit
10(v)-1
Agreements”,
insofar as such statements constitute summaries of the legal matters or
documents referred to therein, are accurate in all material respects and
(ii)
under the heading “Bankruptcy and Creditors’ Rights Issues” fairly summarize the
matters described therein.
(9) Except
as
to the financial statements, including the notes thereto and any related
schedules, and other financial or statistical data included or incorporated
by
reference in the Registration Statement, as to which such counsel need
not we
express any view, the Registration Statement, as of the Effective Date,
and the
Final Prospectus, at the date and time it was filed with the Commission
pursuant
to Rule 424, complied as to form in all material respects with the applicable
provisions of the Securities Act and the applicable instructions, rules
and
regulations of the Commission thereunder.
(10) If
the
arguments were properly briefed and presented to a court, the court would
hold
that the enactment of the Act could not be successfully challenged under
the
United State Constitution in any way that would have a material adverse
effect
either upon the creation and transfer of the Environmental Control Property
or
upon collection of fixed recovery amounts so as to impair in any material
respect the obligations on the Bonds.
(11) Although
such counsel need not pass upon or assume responsibility for the accuracy,
completeness or fairness of the statements included or incorporated by
reference
in the Registration Statement, the Pricing Prospectus, the Issuer Free
Writing
Prospectuses (the Pricing Prospectus and the Issuer Free Writing Prospectuses
taken as a whole collective referred to as the “Disclosure
Package”),
or
the Final Prospectus (except to the extent set forth in paragraphs 8 and
9
above), no facts have come to our attention that have caused such counsel
to
believe that: (i) the Registration Statement, at the Effective Date, 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
not
misleading; (ii) the Disclosure Package, at the Applicable Time, included
an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading; and (iii) the Final Prospectus,
as
of its date, included, or as of the date hereof includes, an untrue statement
of
a material fact or omitted or omits to state a material fact necessary
in order
to make the statements therein, in light of the circumstances under which
they
were made, not misleading; provided
that
such counsel need not express any belief, and need not make any statement
with
respect to: (A) any financial, numerical or statistical information included
or
incorporated by reference in, or omitted from, the Registration Statement,
the
Disclosure Package or the Final Prospectus; and (B) any information included
or
incorporated by reference in or omitted from any Statement of Eligibility
on
Form T-1 (or amendments thereto) of the Indenture Trustee filed as an exhibit
to
the Registration Statement.
Exhibit
10(v)-2
EXHIBIT
10(w)
MATTERS
TO BE COVERED IN OPINION OF COUNSEL
FOR
THE ISSUER, PE RENAISSANCE AND POTOMAC EDISON
In
a case
under Title 11 of the United States Code in which either PE Renaissance
or
Potomac Edison is the debtor, if the case were properly briefed and presented
to
a federal court exercising bankruptcy jurisdiction and exercising reasonable
judgment after full consideration of all relevant factors, such court would
hold
that a transfer of the Transferred Environmental Control Property by PE
Renaissance to the Issuer in the form and manner set forth in the Sale
Agreement
would constitute a true sale and absolute transfer of the Transferred
Environmental Control Property, rather than a borrowing by PE Renaissance
secured by the Transferred Environmental Control
Property.